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Disaster-proof your Finances - 6/4/2012 -

Natural disasters can strike at any time, in any place. Whether it's an earthquake on the West Coast, tornado in the Midwest, or a hurricane in our own backyard, when nature goes on a rampage, the results can be devastating.

In Southwest Louisiana, we’ve had first-hand experience with this reality and have learned the importance of being prepared. Every year when hurricane season begins, a great deal of public attention is directed toward disaster preparedness —keeping extra food, water and emergency supplies on hand; securing your property, and having an evacuation plan in place. But have you also taken steps to survive financially in the event the unexpected occurs?

"During the evacuation for Hurricane Rita in 2005, many people found themselves unprepared for the financial demands that follow in the days, weeks and months after a disaster,” says Nick Fuselier, Security and Compliance Officer with Lakeside Bank. "From simple things like taking enough cash to more complicated issues such as accessing financial accounts and filing insurance claims, dealing with money-related issues after a disaster is not something anyone spends a lot of time thinking about – until the need arises. It’s important to plan ahead and put your finances on your preparedness checklist every year.”

Fuselier recommends giving some attention to the following finance-related items when organizing your personal disaster plan:

Keep some petty cash on hand for emergencies. Depending on the nature of the disaster, ATMs might be out of commission for quite some time. You don't want to keep too much cash on hand, but enough to get by on for a short time is a good idea. It’s also important to consider what you will do if you have to go without a paycheck for a while if your employer is affected by the disaster, or how you will cope if your direct deposit paycheck is delayed because of disaster-related electrical or automated system problems. If you can't get back to work for an extended period, having an emergency fund in your bank or brokerage accounts can help. A standby home equity line of credit you can tap in an emergency is also worth considering for use in emergencies, says Fuselier.

Bring a list of your accounts.

Make sure you have a list of your checking and saving account numbers with you, along with the phone number of the financial institution, in case you need to make arrangements by phone to access your money.

Keep important documents easily accessible. If you have to evacuate immediately, you won't have time to search for things like birth certificates, passports, wills, trust documents, records of home improvements and insurance policies. It's a good idea to keep originals in a safe-deposit box, but you should also keep copies together at home in an evacuation file or box. You can purchase fireproof, waterproof pouches and boxes for the home. If you need to evacuate, you can grab this quickly on your way out. If you're tech-savvy, consider scanning your important documents into a computer file you can store online and/or on a jump drive. Consider putting any personal computer files on this as well. Again, a copy of this electronic storage device should be kept in a safe place out of your home.

Have the right kind of insurance coverage. Review your homeowner's or renter's policy to see what's covered and what isn't. Talk to your agent about flood insurance. Review your coverage amounts to be sure you're keeping up with inflation. Also, make sure you're comfortable with the deductibles. Fuselier says if you can pay those out of pocket, higher deductibles can result in significant premium savings. You may also be able to lower some premiums by taking steps ahead of time to protect your property from loss, such as anchoring your foundation and/or roof, installing smoke alarms and fire extinguishers, clearing brush and trees away from the house, installing storm shutters, and so on.

Inventory your household possessions. Use a video camera if you have one. Otherwise, take digital photos for each item of value, including clothes, jewelry, furniture, electronics, appliances, fixtures, etc. Include a description of each and save these, along with any professional appraisals and estimates of replacement values in a safe place away from your home. Make it a point to update regularly.

In the event of a disaster, Fuselier says one of your first financial chores will be to contact your insurance agent. If the disaster is widespread, however, your local insurance agent might be caught up in the same situation you are. So keep alternative contact numbers for representatives outside your area to get the claims process going as soon as possible. Fuselier advises keeping contact information for all your financial, investment and insurance providers in your evacuation box with your other essential documents, and on an electronic file on that jump drive with other critical information and records. "By taking these precautionary steps, your finances won’t become a disaster, even if you find yourself in the idle of one.”


 

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