Prepare before a disaster hits.
It’s easy to believe that a natural disaster is unlikely and will happen to “someone else.” Yet, natural disasters are surprisingly common. The National Centers for Environmental Information reported that in the first half of the year there were six weather and climate disaster events in the U.S., each with losses surpassing $1 billion. If the property and personal devastation of a natural disaster isn’t enough, an extreme climactic catastrophe can wreak havoc with your finances. The time to disaster-proof your money life is now, before the calamity strikes. Here are seven financial preparation strategies to implement now, before the next big disaster hits.
Cash is essential in the case of a disaster.
Imagine that your community loses power for a month or more (think Puerto Rico). If you don’t have cash, how will you buy what you need? If credit card readers and ATMs don’t function, then you’re out of luck says Bob Rubin, president of Rubin Wealth Advisors in Boca Raton, Florida. Rubin suggests keeping at least $1,000 in cash in a home safe or secure location. As a veteran of multiple hurricanes, he’s learned the hard way to prepare for a disaster.
Keep track of your most important financial documents.
You need to keep these dry and readily accessible, says Neal Stern, a member of the American Institute of CPAs’ National CPA Financial Literacy Commission. That includes a driver’s license, birth certificate, passport, Social Security card, health insurance and/or Medicare cards. Next, you’ll need recent banking, investment and retirement account statements, or at least the identification numbers so you can access the records online. Your car titles and registrations should be handy in case of major damage, he says.
Use available technology to prepare.
Another Florida financial planner, Todd Sensing, founder of FamilyVest in Destin, knows about hurricanes. These financial disaster hacks will save you time, money and heartache. Sensing suggests downloading the fema.gov app if you’re in a disaster-prone region. The app helps you stay in touch with first responders and documents issues in your area. “In today’s 24-hour weather news cycle we are given great information on the probable cone. I recommend that clients make refundable hotel accommodations the moment that their area enters the cone. These can be canceled 24 hours in advance if not necessary and will allow you to evacuate more easily should the need arise,” Sensing says.
Scan and store your financial documents in the cloud.
Despite the upfront time required to scan all your essential financial records, you’ll minimize stress if it’s easy to access this information after the disaster. And, you can share these documents with a trusted family member as well, says Paul J. McCarthy, president of Kisco Capital in Mount Kisco, New York.
Know what your insurance policies cover.
Most homeowners insurance policies don’t cover flood or earthquakes, says Steven Jon Kaplan, founder and CEO of True Contrarian Investments in Kearny, New Jersey. In all cases, Kaplan recommends separate flood insurance. If you’re near an earthquake fault line, despite high deductibles, the insurance is worth it when the big one hits. And, as hurricane-surviving Floridians know, some homeowners policies include coverage for wind damage but not from flooding, while others cover neither wind nor rain, Kaplan says.
Know what you own.
Although ominous, having a record of not only your financial documents, but your physical possessions is crucial. It’s great to have the appropriate insurance, but if you can’t document your losses, you’ll have a difficult time collecting from the insurance company. The better your records of your personal possessions are, the more likely you are of receiving the cash to replace them.
Watch out for scammers.
“Just as important as preparing for a disaster is realizing that disasters bring out both the best and the worst in people, especially those seeking to profit from the misfortunes of others,” says Joseph P. Borg, director of the Alabama Securities Commission and president of the North American Securities Administrators Association. “The most effective and dangerous scams are ripped right out of the headlines. Con artists read the headlines and have a track record of tailoring investment scams to fit the latest disaster.” Be ready for an onslaught of cons, from those fake charities collecting for victims to unscrupulous hucksters promoting “can’t miss” get-rich-quick-schemes.
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7 Ways to Prepare Your Investments for a Natural Disaster originally appeared on usnews.com
