If a hurricane, flood, wildfire, or other natural disaster were to strike your area today, would you be ready for it financially? The following tips can help you get your insurance coverage and financial records in order so that you are better prepared to weather the storm financially. For advice about insuring your home and personal property, please consult with your insurance agent
1. Review your insurance coverage regularly.
To help ensure that your homeowners or renters insurance stays in sync with changes to your home and personal belongings, it’s a good idea to review your policy with your insurance agent annually, especially if you’ve recently renovated your home, made a major purchase, or begun using your home for business. Also be sure to know what your policy does not cover. Most homeowners insurance generally does not cover flooding. If you want this coverage, you’ll need a policy specific for it. You may be able to receive flood insurance through the National Flood Insurance Program (NFIP) if your community participates in the program. If you are able to receive insurance through this program, you may also want to consider supplementing it with coverage from a private insurance company.
2. Create a home inventory.
This can be helpful if you ever need to file an insurance claim or substantiate your losses for a tax deduction. Your home inventory should include basic information about your personal belongings, such as brand, model, and serial number. Add the sales receipts and appraisals for your high-value items, such as furniture, appliances, and art. Taking a video or photos of every room, as well as interiors of drawers, cupboards, and closets can help substantiate your insurance claims and jog your memory. Once your home inventory is complete, keep a copy of it offsite in a safe location. It is also important to update your inventory occasionally.
3. Protect your important records.
To protect these important records or documents, you may want to keep them outside of your home in a safe location. For example, a safe deposit box at a bank can be good for deeds, titles, birth and marriage certificates, divorce decrees, contracts, and copies of the documents. Your attorney may be able to store your will and trust documents for you. Your safe deposit box may not be a good choice for originals of documents if you live in a state that seals safe deposit boxes after the account owner’s death.
4. Pack a financial go bag.
If a natural disaster is happening, you may not have time to gather documents or information. Having a financial go bag already packed or stored in the cloud can help ensure you will have your documents and important information if you need it. If your home is destroyed, you will likely need documents that verify your identity and your family members. You may also need proof of ownership, such as deeds, rental agreements, and vehicle titles, as well as copies of your insurance policies. Many of these documents can be scanned and stored on a USB flash drive that you can take with you. You may also need the contact info for your insurance companies, banks, credit card companies, mortgage lenders, and your financial and legal professionals.
For a more complete list of documents and information you may need in the days following a disaster, please see FEMA’s Emergency Financial First Aid Kit, which can be downloaded from www.ready.gov/financial-preparedness.
5. Use direct deposit for your income.
If you receive income via paper checks, consider setting up direct deposit so that your income can continue to flow in even when mail cannot be delivered to your home due to a natural disaster.
6. Pump up your emergency fund.
Having some cash that you can draw on in an emergency may help you avoid racking up credit card debt after a disaster, particularly if you are out of work for a while. You may want to keep this fund in an easily accessible account such as a savings account.
With offices in Rutland and Williston, Vermont Copper Leaf Financial develops a customized wealth management plan designed to integrate every aspect of your financial life. Our approach is to provide clarity and calm amidst the chaos. Where there is uncertainty, we look for facts. We call our approach evidence-based investing. Call us today at 802-878-2731 to schedule a strategy session and begin building your road map to financial success.
Article published in May 2021 edition of Eye on Money. If you would like to be added to our mail list please email [email protected].