When you're in the middle of a disaster, it's hard to think about long-term issues. Focus gets narrowed to finding a way to get through each day as it comes. Fortunately there are simple steps that you can take to prepare for a catastrophe.
- Have a plan. Government websites like ready.gov can help you formulate a family plan in advance. Where will you meet if there is a catastrophe while your kids are at school? Who can you contact that is not in your local calling area? (After Katrina, so many people were trying to reach loved ones that the phone lines were jammed for several days. Calls to people living in other area codes became useful ways to relay information because you could get through.) If you're ordered to stay indoors, simple steps like having enough bottled water for your home and non-perishable food to get through a few days can make a huge difference.
- Review your insurance coverage. You've got to have the basics in place that at a minimum are homeowner's insurance, auto insurance, and depending on the part of the world you live in, insurance for specialized catastrophes like floods and earthquakes. There were flood disasters in 25 states in 2010, so don't think because you don't live near the ocean that you're ok. If you own a business, add business interruption coverage to that list. It's especially helpful to have a knowledgeable Property & Casualty Insurance agent help you structure things properly up front. In the immediate aftermath of a disaster, contact your agent and the carriers to begin the claims process. Pictures speak a thousand words, so take photos and video of your home/office and store them online so that you can access and provide them to a claims adjuster.
- Keep a list of important contacts, phone numbers, and policy numbers. It helps to have the toll-free numbers for your insurance carriers, policy and account numbers, as well as contact information for family and friends in a document that is accessible to you in the aftermath of a disaster. You can put a short list of the most important information on a laminated card and keep it in your wallet or purse.
- Protect documents. We all have important papers (like birth certificates, marriage licenses, etc.) that are sometimes irreplaceable. Do whatever you can to make sure these documents are stored safely and securely. If they're in a safe deposit box, ask your bank about protection from flood or fire. If you store these documents at home, buy a fire-resistant, waterproof box. These don't work in every circumstance, but they give your important papers a fighting chance.
- Have a backup. With the abundance of digital cameras, it's so easy to take a snapshot of your documents and store those pictures somewhere online. This also goes for your family's critical data stored on computers at home. Online backup services are a lifesaver if your home is destroyed or inaccessible.
- Have an emergency fund. Basic financial advice is to have an emergency fund that is accessible to you at all times. Claims and government assistance can take months to come through, so having readily available cash can keep you afloat and out of credit card debt if you're paying for hotels and meals.
- Remember what is truly important. In the aftermath of the storm, people didn't really miss a lot of the "stuff" that was destroyed. They found that beyond some photos and other irreplaceable items that as long as they had their loved ones together and safe, everything else could be handled. It's easy to lose sight of this as we go about our daily lives. Hug your loved ones and cherish the time you have together.
The above list should be a good starting point for your preparations. Learn more about planning for a disaster.
FPA member H. Jude Boudreaux, CFP®, is the founder of Upperline Financial Planning in New Orleans, La. FPA member Rick Miller, Ph.D., CFP®, is the founder of Sensible Financial Planning.