As I continue to watch the horrific news reports of the hundreds of thousands of people displaced from their homes because of Hurricane Katrina, I wonder what I would do if my home were in imminent danger of being destroyed by a fire, hurricane or some other natural disaster.
What would I grab? Could I quickly put my hands on the important documents that I would need?
Could you?
Thankfully, my husband has an awesome filing system. Every important document is neatly tucked away in a folder in our home office file cabinet.
But guess what? It would take a few hours to assemble key paperwork into one box we could take with us if we had to evacuate in a hurry.
In an emergency, it’s unlikely you would be able to pack your file cabinet. Or worse, sort though the piles of files stacked in a corner somewhere in your house.
Right now, the families that have been displaced are focusing on their basic needs – shelter and food. However, they’ll soon face a new challenge – acquiring pay stubs, insurance papers, bank statements or any of the other financial records that are the bane of our modern-day existence. Many of the businesses where these families worked have been destroyed, and possibly so have their files.
All of us should use Katrina and the havoc this historic hurricane wreaked as a lesson to get our financial houses in order.
To that end, the Financial Planning Association put together the following list of tips that I think are very helpful for pre-disaster planning:
Prepare an evacuation box that is fireproof, lockable and light enough to carry in an emergency. Keep all your important financial documents in this box, including some cash or traveler’s checks, insurance policies, extra checks, a copy of your driver’s license, Social Security number (or the card itself), bank, investment account and credit card account numbers, legal documents (such as wills, marriage and birth certificates, titles to your home and vehicles).
Have a backup of your important financial documents. “If you live in an area like New Orleans and you’re looking at that level of disaster where your house is not only destroyed but you are going to have to sustain yourself on whatever you can carry, I don’t think documents are something you’re going to try and carry,” said Arthur Stein, a certified financial planner and vice president of First Financial Group based in Bethesda, Md.
“I can’t imagine suggesting that in such a situation, when you might not have enough food or water, that people grab a box.”
So in addition to or in lieu of a box with your important files, Stein recommends making photocopies of your documents and placing them either in a safe-deposit box or giving them to a trusted relative or friend who does not live in the same area.
Don’t forget to make a list of household items. Include photographs or a videotape of your possessions, especially expensive things.
Make a list of the financial professionals you need to contact in the event of an emergency.
Now is the time to also determine whether you have enough insurance coverage. For example, do you have disability insurance or are you adequately covered? If you were injured in a natural disaster, would you be able to live off your savings?
Get life insurance or reassess whether you have enough. And what about your homeowner’s insurance coverage? Do you have flood insurance?
The West Coast’s flooding season typically runs from November through March and results in millions of dollars in damage for those residents each year, according to the National Flood Insurance Program.
Your basic homeowner’s policy does not cover floods. Even if you’re not in an area at high risk of flooding, you may still need protection. Twenty percent to 25 percent of all flood insurance claims are filed in low- to moderate-risk areas, the flood program says.
If your community participates in the National Flood Insurance Program, you can purchase flood insurance from a licensed private insurance company or though an independent property and casualty insurance agent in your state. For more information, on flood insurance go to www.floodsmart.gov.
Be sure to buy replacement insurance for your home and its contents. If you’re a renter, buy renter’s insurance because the insurance your landlord carries does not cover damage to your personal possessions.
Although any flood insurance policy you buy must be in place for 30 days before coverage takes effect, flooding can happen any time of the year.
What happened on the Gulf Coast is horrible. But this disaster underscores the need for all of us to prepare for the unexpected.
Michelle Singletary’s column appears in The Herald on Thursdays and Sundays.
Washington Post Writers Group
Michelle Singletary
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