Financial Tips To Prepare For Disaster
The Illinois CPA Society offers tips for preparing and coping with the financial implications of a disaster:
1. Establish an emergency fund and save until you have enough for six months of basic expenses.
2. Check your home insurance coverage and address any shortfalls. Be sure you understand the exact coverage for flooding; you may need further coverage for basement sewer back-up or surface water flooding.
3. Inventory your household possessions by making a video recording and a back-up list of everything you own; you could also create a photo catalog. If disaster strikes, this documentation could:
- Help you prove the value of what you owned if the possessions are damaged or destroyed.
- Make it more likely you'll receive a fast, fair payment from your insurance company for your losses.
- Provide evidence for tax deductions you claim for your losses.
4. Buy a lockable, durable "evacuation box" to easily grab in an emergency. Also make copies of the contents for a safe deposit box at another location; let a close relative or someone you trust know where it can be found. The box should be large enough to carry the following items:
- A small amount of traveler's checks or cash.
- A portable back-up of your computer hard drive, including your financial software files.
- A flash drive back-up of irreplaceable personal photographs (or their negatives).
- A flash drive of pdf copies of important documents and prior year tax returns.
- Copies of important prescriptions for your entire family, including pets.
- Health, dental or prescription insurance cards or information for your entire family and pets.
- Copies of your auto, flood, renter's or homeowner's insurance policies (or at least policy numbers).
- A list of the numbers and contact information for bank accounts, loans, credit cards, driver's licenses, investment accounts and Social Security cards.
5. Have daily essentials easily on hand in a place where they can be found quickly -- your driver's license, automated teller machine cards, a credit card and debit card.
"We all like to think we're ready for anything, but chances are we keep putting off tedious tasks like checking our home owner's insurance or making a list of important household items," said Elaine Weiss, President and CEO of the Illinois CPA Society. "Unfortunately, the disaster experienced by Californians should serve to remind us that a little preparation goes a long way when you're in the midst of a crisis that could have serious financial repercussions." She also recommends consulting a CPA or other professional advisor with questions and to get overall advice for planning ahead or creating a recovery plan.