Sheila J. Fleischer | Posted on Feb 04, 2022
As witnessed recently in a number of areas in the United States, natural disasters such as a severe storm, fire or flood can happen at any time. These tragedies cause damage to homes and property, and create financial challenges. We often prepare for a natural disaster by purchasing supplies for our homes such as drinkable water, canned goods, batteries and flashlights. Preparing finances and documents for these catastrophic events is also important. Below are some tips to help when preparing for, and dealing with, the financial impact of natural disasters.
Safeguard important documents and information such as:
- Originals and copies of your identification including driver’s license, passport, Social Security card, and birth certificate. These are helpful if you have to prove your identity. It is best to have originals, but copies are also useful if the originals are lost or destroyed.
- Contact information including phone numbers and websites for your banks, brokerage firms, and insurance companies.
- Copies of your financial information such as credit and debit cards, both front and back, and checks. During a disaster, you may need your account information from these documents to authorize payments.
- Current insurance policy information for homeowner/renter, auto and life insurance coverages.
- Originals and copies of medical information, such as insurance cards and health records.
- An inventory of valuable personal property. Document the value of the items by keeping receipts and/or written appraisals, and perhaps photos.
Consider storing your information in the following ways:
Emergency evacuation bag. Along with personal safety items in your bag, you should include copies of some of the important documents listed above. Large amounts of cash should always be kept in your FDIC-insured bank account. However, you might consider keeping a small amount of cash to purchase food or supplies, just in case ATMs and credit and debit cards are not working. Make sure to keep your evacuation bag in a secure and accessible place for a quick exit.
Digital storage. Most documents can be retained electronically. When deciding which documents to keep digitally, consider how to access the documents using a smartphone or a computer. Encrypt sensitive documents and set your electronic device security to require a password, your thumbprint, or facial recognition for additional safety.
Safe deposit box at your bank. This may be an appropriate location for documents that are difficult or impossible to replace, and that you do not need to access frequently. Since most safe deposit boxes are not waterproof, you might also seal these items in waterproof bags or containers in preparation for a flood or other water damage.
Furthermore, keep in mind that banks may temporarily limit operations because of the natural disaster’s impact to the physical bank building. This might include closing a lobby, converting to drive-up only services, or encouraging customers to use ATMs or digital channels to access their banking services.
If you do not think you can make your loan payments on time due to a natural disaster, contact your lender immediately. Paying your debts late or not at all can result in penalties, interest charges, and damage to your credit score. It is important to contact your lender as soon as possible to explain your situation. Your lender should be able to work with you on a solution.
No one anticipates facing a natural disaster, but it can happen anywhere and at any time. For this reason, it is important to take the time now to prepare so that you can minimize the financial impact of a natural disaster. Making this a priority can help ease the challenge of restoring or replacing your property after a catastrophic event, as well as give you some peace of mind in knowing that you are prepared.