Disaster ready finances

Prepping your finances for a natural disaster

No matter where you live, there’s a possibility of a natural disaster striking. Even though many of us create a plan so we’re at least a little prepared—who gets the kids, who gets the dogs, where to meet if we get separated, etc.—most do not worry about what they’d do with their finances.

So after a tornado took out a third of Joplin, Mo., in May 2011—and destroyed the homes of some good friends of mine from college—I asked them what they’d do to prevent a financial disaster from accompanying a natural one. Here’s what they said they wished they had put aside and had ready, preferably in a portable and fireproof safe (available for less than $100 at a hardware store).

  • Birth certificates
  • An official ID, such as an official, plain-old, non-license ID card
  • Copies of insurance policies (homeowner’s or renter’s, life, etc.)
  • Wills, DNR orders, and other similar documents
  • Cash (a few hundred you stash over the course of a few months) and/or a credit card (one with enough to cover a night or two at a motel, gas, food, etc.)
  • Contact information for friends, family, insurance agent, and even your veterinarian if you have pets
  • Any non-financial info you might need, such as a list of medications (and some extras, if possible) as well as extra glasses or contacts

Basically, put in it anything you need to get through the first few days—documents that prove who you are; whatever helps you access money; how to contact an insurance agent, family, leadership on post, and others; enough extra medication to last until you can get a new prescription, etc.

You’ll also want copies of documents—certified ones, when necessary—in a safe deposit box or lockbox at a bank. That way, if your home is destroyed, you can (hopefully) get what you need to move forward. Pricing varies, so you can call around to your local bank(s).

One more thing: you should also know whaty our insurance policy really covers. For example, most policies cover damage from a water pipe that breaks inside of your house, but do not cover water damage from a pipe that breaks outside of your home and then leaks into it.

Although reading through a whole policy isn’t exactly exciting, you'll be glad you did if you ever have to use it. (A friend of mine in Colorado learned this during the 2012 wildfires, when the water he used to put out a fire around his house got into it, and insurance didn’t cover the interior water damage. As you can imagine, he was not real thrilled to find this out after the fact.)

Although nothing can truly prepare you for the worst, doing these few simple things can make your life easier when it does occur.

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