Be prepared to protect your finances in a disaster
When Delores and Harry Haynes evacuated from New Orleans’ Gentilly neighborhood as Hurricane Katrina headed their way in 2005, they made sure to grab the Ziploc bags in their file cabinet. Those bags contained their homeowners and flood insurance policies and other vital financial information.
Even before they were able to come back to see the damage to their home of 30 years, television reports made it clear the news wasn’t good. “We began making phone calls the day after the storm struck,’’ Delores Haynes recalled. By the time they learned that the entire first floor had flooded, the claims process was already underway.
Nothing can truly ease the trauma and challenges that stem from losing your home. But Delores Haynes can attest to how important it is to be prepared when the worst happens.
There are a number of steps that can help you prepare for a fire or larger disaster, starting with pulling together your important paperwork.
Just as essential as a stash of batteries and bottled water are copies of your property deed and insurance policies. Other paperwork that can help you get on your financial feet quickly are: recent tax returns; a copy of your mortgage; recent bank, credit card, and retirement account statements; a home inventory, and records of any major improvements done on your house.
Also good to include: recent pay stubs, Social Security cards, and other identification, a list of emergency contacts, medical insurance information, and prescription records.
You can use Ziplocs, invest in a waterproof, fireproof box, or stash the material in a safe deposit box. Just update the information periodically and take the key when it’s time to evacuate.
Another option is scanning documents and storing them online, so you can access them from any computer if you are displaced. A virtual storage service may cost as little as $2.99 per month. Or you can e-mail the documents to yourself and set them aside in a designated folder.
One thing that can’t be stored virtually: cash. The American Red Cross recommends having enough money on hand to get through three days if you are displaced and ATMs are unavailable. More details on financial planning for a disaster can be found on the Red Cross website: http://rdcrss.org/bHOP9y .
Confirm that your coverage will allow you to rebuild your house if it’s destroyed — make sure you’re covered for replacement value not just market value.
Also ask about discounts for preventative measures. Many insurers will reduce premiums if you install fire detection systems that call the fire department.
Even if you don’t live in a flood-prone area, it’s worth looking into the National Flood Insurance Program.
Another thing to consider is how to get in touch with your insurer in a disaster. Many are now using tools like Twitter and Facebook to connect with customers. Individual agents are also using text messaging — so make sure your agent has your cellphone number.