Organizing Your Financial Life for Natural Disasters

Natural disasters can strike at any time, leaving individuals and families with significant financial challenges. To mitigate the impact of these events, it is crucial to organize your financial life ahead of time. This article will provide you with essential steps to help you prepare for natural disasters and maintain financial resilience.



1. Compile and Assess Important Documents and Contacts

According to the Federal Emergency Management Association (FEMA), the first step in preparing for natural disasters is to compile and assess important documents and contacts. Gather the following documents and store them securely:

* Birth and marriage certificates
* Social security cards
* Military service records
* Pet's ID tags, microchip, and vaccination records
* Housing payments, utility bills, credit/debit card information
* Receipts from child support, checking, savings, and retirement account numbers
* Insurance policies
* Paystubs, tax statements, and wills
* Medical information: health insurance and pharmacy cards, records of immunizations and allergies, copies of prescriptions, and records of medical devices or equipment for disabilities

Additionally, make records of important contacts, such as:

* Landlord or mortgage representatives
* Doctors, dentists, or other healthcare providers
* Insurance agents
* Representatives in charge of military benefits and social and disability services
* Assistive technology or medical equipment providers
* Lawyers
* Financial advisors
* Banking institutions
* Neighborhood, civic, and house of worship contacts

FEMA advises storing important phone numbers somewhere besides just your cell phone.

2. Understand Your Insurance Policies

Review your insurance policies to ensure they're accurate and current. This includes checking the deductibles, coverage limits, and any exclusions or endorsements. For example, homeowners insurance typically doesn't cover flooding, so you may need to purchase flood insurance from the National Flood Insurance Program (NFIP).

Assess your needs by evaluating your financial situation and the value of your belongings. Consider the cost of replacing your home, belongings, and vehicles in the event of a disaster. Consult with a property casualty agent to help you determine the right amount of coverage for your specific property and/or possessions.

3. Consider Additional Coverage

Depending on your situation, you may need to purchase additional coverage, such as flood insurance, earthquake insurance, or personal umbrella insurance. For example, if you live in an area prone to wildfires, you might want to consider purchasing additional coverage to protect your property.

4. Store Documents Securely

Store paper and electronic copies of all files in safe locations. Consider keeping paper copies in a fireproof and waterproof box or safe, a bank safe deposit box, or with a trusted friend or relative. If you're already using a safe deposit box, check state laws to confirm who can and can't access the safe if the owner dies or can't access it themselves due to injury or illness.

To store electronic copies of important documents, use a password-protected format on a flash or external hard drive, which you can also keep in the fireproof, waterproof box.

5. Have Cash on Hand

FEMA and the Red Cross advise individuals to keep cash in the same safe location as one’s important documents to pay for emergency purchases in the event that ATMs and electronic or online banking resources aren't available. The amount of cash should be based on the basic needs of your family, including gas, food, and medications.

6. Download Banking and Bill Payment Apps

Downloading banking and bill payment apps for your phone can help you stay mobile in times of emergency. These apps allow you to access your financial accounts, pay bills, and transfer funds even if you're unable to access your physical bank or if online banking services are down.

7. Photograph or Record Valuable Belongings

Photographing or recording a video of the rooms in your home and any valuable belongings is also advisable as a form of record keeping. This can help you prove the value of your belongings in the event of a claim.

By following these steps, you can effectively organize your financial life ahead of natural disasters and maintain access to financial resources during and after these events. Being prepared can help you minimize the financial impact of natural disasters and ensure a smoother recovery process.

Sources:
* FEMA: "Emergency Financial First Aid Kit (EFFAK)"
* Lisa Berdie, director of policy and research for the Financial Health Network
* AP article: "If you live in a part of the world prone to wildfires, floods, blizzards, tornadoes, or earthquakes, there are ways you can make sure you’re financially prepared for disaster, beyond insurance."
* U.S. Bank: "How to Safeguard Assets Against Natural Disasters"