The Fall is both peak fire season in the Western US and peak hurricane season in the Southeast. Furthermore, California is way overdue for a major earthquake. For all of these reasons, it seems now is a good time to make sure you are ready for a disaster. While there are many things to prepare for a potential disaster, my attention is focused on the critical financial items.
- Collect important documents. Keep in an easy-to-grab file, ideally in a fire-proof safe or safe deposit box, the following critical documents:
- Birth and marriage certificates
- Social security cards
- Estate documents (e.g., will, trust, power of attorney, healthcare directive)
- Cash ($100-$200 in small bills in case ATMs are down)
- Document your contents. Some insurers will make you itemize your contents in order to get reimbursed, which can be hard to do if your house is destroyed. It’s a good idea to create an inventory of all contents, either by narrated video or spreadsheet, and store offsite or in the cloud. Save receipts for large ticket items.
- Review your insurance. Make sure you have adequate life, disability and health insurance. Review your property insurance to make sure you have enough building and contents coverage. Over 70% of the homes in the 2017 Napa fires were under-insured. Make sure your current home address is listed on your homeowners and auto insurance policies if you’ve moved. Make sure all people are listed as named insureds.
- Automate bill pay. It can take weeks or months for life to return to normal after a disaster. The last thing you’ll want to be worrying about is paying your bills on time. If you miss payments, this can lead to a falling credit score, which can have negative consequences if you need to get a loan to rebuild, buy a new car, etc. To make life easier, automate as many of your bills as possible so that payments continue as scheduled.
These are just a few of the critical financial items that will help ease the recovery process after a natural disaster. For an even more comprehensive list, google FEMA’s Emergency Financial First Aid Kit (EFFAAK).