Finer Finance Fridays #11
Updated: Mar 27
If a Disaster Strikes, are you prepared?? Ferocious storms, earthquakes and other disasters rarely give advance warning and can happen anytime. Whether a natural catastrophe strikes an entire community or a fire destroys a single home, the consequences for the survivors can be traumatic, including severe financial losses from uninsured property, the destruction of vital documents and temporary disruptions in the ability to work or conduct essential transactions.
As we think about the devastation of Hurricane Harvey and the threats of more damage to our nation, friends, and family from Hurricanes Irma, Jose, and Katia, catastrophic events in California, Oregon, Florida, Georgia, and across the world, it's important to have a plan for what you would do if a tragedy strikes and you couldn't live in your home or go to work for quite a while.
What would you do? Do you have life insurance? Are your most important possessions insured and your financial documents protected from ruin? And if you had only a few moments to evacuate your home and could not return for several days or even weeks, would you have access to cash, banking services and the personal identification you need to conduct your day-to-day financial life? Here are tips from FDIC Consumer News along with my opinions on the matter.
Anticipate What Could Go Wrong. Think about the most likely hazards and plan accordingly. Your state or local office of emergency management may be especially helpful. Find out if your city or county offers a service that will send you a text message or an e-mail warning at the first sign of an imminent storm or other hazard that might require you to evacuate. Also see what tips and recommendations they may have on preparing for a disaster. Periodically review all your insurance coverage. This includes personal life insurance, homeowner's or renter's insurance and car insurance. Find out what is and is not covered by your policies. What would your family do, if you didn't survive the disaster? Could they afford to take care of your final arrangements? What about your home? The typical homeowner's insurance policy does not cover damage caused by floods or earthquakes, and it may be conservative to purchase extra coverage for hazards like these, even if not required by your lien holder. The idea is to have enough coverage to take care of damage to your house, cars and other valuable property and provide for temporary lodging, should you and/ or your family and pets be displaced. Keep records of your personal property and the estimated value. Check with your insurance agent to make sure you have the right amount of coverage. Consider taking a video or photos of your property. This documentation will come in handy if you need to file a claim. Check out this article on "Why Your Disaster Kit Needs a Home Inventory" For additional guidance on how to create a home inventory, see suggestions from the National Association of Insurance Commissioners.
Use Direct Deposit. Having your paycheck or other payments automatically sent to your account will ensure that you can access the funds quickly, without the risk of having a check lost, delayed or stolen. Consider establishing computer or smartphone access to your banking account. These services can enable you to manage your finances online from anywhere, without writing checks.
Build or maintain an emergency savings fund. (Check out Finer Finance Fridays # 5)
Because a disaster may affect your ability to earn income, savings can help you through any difficult financial period without taking out a loan or borrowing from retirement savings. Experts say emergency savings should equal at least three to six months of living expenses.
What To Have Ready. Consider keeping the following items in a secure place and readily available.
Identification and other key documents that may be needed to restore your financial records. These include copies of driver’s licenses (or state identification cards for non-drivers), Social Security cards, passports, birth certificates, insurance cards (or other proof of insurance coverage), and your inventory of personal property.
ATM/debit cards and credit cards. You may want to keep copies of the front and back of your cards in an emergency evacuation bag or box in case you are unable to access your actual cards.
Phone numbers and account information at your financial services providers. This information for the bank, credit card companies, brokerage firms and insurance companies you do business with will be helpful if you need to replace lost cards or documents or request other assistance.
What To Keep Where. Here is a strategy that works well for many people: Make backup copies of important documents. This also includes your home inventory records. You can make paper copies, but also consider scanning these records and storing the images away from home, perhaps by e-mailing them to yourself at a secure account that you could access anywhere or using a fee-based, online storage service. There are also services with basic free plans like Box or DROPBOX or FLIPDRIVE. Be sure to let trusted - loved ones know where to locate originals and copies. Decide what should or should not be kept in your bank’s safe deposit box. This service is best for important documents and items that will be difficult or impossible to replace, but think twice before using one for anything you may need immediate access to, such as passports and originals of powers of attorney. However, be aware that home safes are not as secure as safe deposit boxes. A home invader could more easily break into your home, force you to open the safe or take your entire safe and access the contents, while they can't do that to your safe deposit box at the bank. For added protection, seal any important documents, including those in bank safe deposit boxes, in airtight and waterproof plastic bags or containers in case of a major flood or other water damage. For guidance on where to store your original will, check with an attorney about what is required or recommended under your state's law.
Take precautions against identity theft. Start by protecting the debit and credit cards and IDs (or copies) in your evacuation kit. Keep your evacuation container in a secure place in your home, and because a natural disaster can result in everything in your house getting scattered for miles, these containers should be portable and securely locked.
Financial Scams. The Federal Emergency Management Agency (FEMA) is raising awareness that disaster survivors, and their friends and family, must be alert for false rumors, scams, identity theft, and fraud. Although many of us are working hard to help our neighbors now, during chaotic times, someone will always try to take advantage of the most vulnerable. Beware of phone and internet scams that may not be coming from a credible source. If you are unsure or uncomfortable with anyone you encounter claiming to be an emergency management official or collecting funds on behalf of official sources, don't give, and definitely don't give out your personal financial information. Give to sources that are well known and sources you trust. Remember, if it sounds too good to be true, it probably is.
We close out this week's blog post with a call to prayer and philanthropy. The (Walton)Jones family and the Finer Finance Campaign is praying for all impacted by these tragic events. Our hearts go out to all of you. We want to do our part in the recovery efforts and we are grateful to be in a position to be able to donate 5% of campaign donations we receive during the month of September to support the ongoing relief efforts of those impacted by tragedies across our nation. 5% of any contribution you make to me through the month of September, will be donated to the American Red Cross, our gifts will be matched by my employer, two to one! Read more about it here and make a donation TODAY!
Tips from the Federal Emergency Management Agency Preparedness
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