From headline-grabbing tsunamis, hurricanes and wildfires that wipe out entire towns, to floods and electrical fires that affect a single home, disasters are a fact of life. While nobody wants to experience one of these events firsthand, everybody should be prepared to recover from one should the unthinkable happen. Here we offer some tips that will not only help you get your financial house back in order, but will also help you rebuild your brick-and-mortar residence and re-establish your life.
Tutorial: Introduction To Insurance
What You Will Need
Paperwork is the key to disaster recovery. With the proper paper trail, you can recover or replace the vast majority of your material possessions. The first step in your disaster preparations is to make copies (certified copies, when possible) or get duplicate originals of your key documents, which would include personal identification papers, financial records, credit card information, vehicle-related records and other important papers. (To learn more, read 8 Steps To An Organized Financial Life.)
If you suddenly find yourself standing in a pile of rubble that was once your home and your worldly possessions, establishing your identity will be of paramount importance. Access to personal identification documents such as your Social Security card, driver's license, marriage license, birth certificate, passport and any citizenship papers will help you quickly establish your identity and speed up the co-ordination of your efforts with insurance companies, construction contractors, bankers and other entities involved in rebuilding and recovery.
Most investors have an extensive paper trail that includes banking information, such as checking and savings account statements; retirement account information, which may include 401(k), IRA, brokerage and Social Security statements; and investment-specific information, such as leases, rental records, deeds, titles, bills of sale and life insurance policies. Tax records should also be taken into consideration.
Homeowners will have mortgage papers, insurance policies, and perhaps appraisals, loan information or deeds. When it comes to the contents of your home, proof of ownership may also be important for insurance purposes. Such proof can include photographs or videos of personal possessions; remember, digital cameras and camcorders make it possible to quickly and easily create a complete home inventory record.
Credit Card Information
Duplicate credit cards, or at least photocopies of the front and back of each of your credit cards, will come in handy should you need to access or replace all of the plastic once tucked into your wallet. Include contact numbers for each of your creditors if the numbers aren't already on the cards. PINs and passwords will also be of value.
The titles, warranty papers and maintenance records for any vehicle you own will enable you to provide proof of ownership and will be very useful if you decide to sell the vehicle. While cars and trucks obviously fall into the vehicle category, don't overlook campers, boats, personal watercraft, snowmobiles, trailers and anything else that moves and costs money to replace.
Other Important Papers
While everyone's personal situation will be slightly different, additional documents that may be important in a disaster recovery situation include disability and other medical records, proof of military service, child custody agreements, prenuptial agreements, diplomas and educational transcripts, death certificates and wills.
Where to Store It
Once you have gathered the necessary paperwork, you need to develop a system to organize and store it. Should you ever need to access this information, you'll want to be able to find exactly what you need as quickly as possible and with a minimal amount of effort. Start by getting a three-ring binder or portable file folder. Use color-coded tabs to create individual sections for each item. Store documents in plastic covers: not only will they provide some protection, but they will also stop you from accidentally discarding original documents.
The documentation you keep in your house should be stored in a safe but convenient place. A fireproof safe, locking filing cabinet or portable lockbox all provide suitable storage. If you live in a flood-prone area, be sure to use a watertight container. If you choose a portable storage container, make a habit of storing it in the same spot each time you access it. In the event of an emergency, you want to be able to go right to the container, grab it, and get out - without wasting valuable time searching for it. Few things will add more to your stress in a time of crisis than a fruitless search for important documents.
If you are tech-savvy, a computer and a scanner will allow you to store many of your important papers electronically. Your entire document library can be burned onto a CD or stored on a portable storage device - some of which are so small they can be attached to a keychain. Regardless of your storage medium, you are going to want two copies of your disaster recovery materials: one that you keep at home and one that you keep off-site. A safe deposit box at a bank, a locked cabinet at work and a trusted relative's residence are all common secondary storage sites.
Rebuilding your life in the wake of a disaster is a daunting task. However, advanced preparation can go a long way toward making recovery easier. If you don't have your documents in order, there's no time like the present to get started. Once you have everything in its proper place, remember to update it. If you lack the time or energy to keep your files updated on an ongoing basis, schedule a yearly checkup and use it as an opportunity to put the latest version of everything into your files. Even the most well-organized disaster recovery materials will be of no use to you if they are out-of-date.
EntrepreneurshipThere are a lot of risks associated with running a business, but there are an equal number of ways to prepare for and manage them.
Home & AutoRestrictive rules and high fees are just some of the things to watch out for before joining an HOA.
InsuranceTough times call for desperate measures, but is raiding your life insurance policy even worth considering?
InsuranceTo avoid MEC status, flexible-premium policies must cap the amount that can be paid into the policy over a period of seven years.
EntrepreneurshipFind out which factors you should weigh when searching for income-producing real estate.
InsuranceYes, if you've no other coverage options. Here’s what you need to know about how it works and how it differs from employer-provided and marketplace plans.
Home & AutoWith a few simple policy additions you can protect your holiday plans from being ruined.
Options & FuturesLearn the 10 steps that lead up to closing the deal on your new home and taking possession.
InsuranceAn insurance claim is a formal request made to an insurance company that asks for a payment based on the terms of the policy.
Home & AutoMany dream of home ownership, but the timing should be right. There are a host of reasons why you may want to put off homeownership for awhile.
Vandalism is covered under an all-perils home insurance policy unless it is specifically excluded. Vandalism coverage applies ... Read Full Answer >>
An all-perils homeowners insurance policy covers damage from trees in the event that it happens suddenly and by accident. ... Read Full Answer >>
A typical all-perils homeowners insurance policy covers the replacement of a roof, regardless of age, only if it is the result ... Read Full Answer >>
House fires are one of the most common causes of damage to homes, and almost every homeowners insurance policy covers against ... Read Full Answer >>
An all-perils homeowners insurance policy does not usually provide coverage for an actual broken pipe. However, the water ... Read Full Answer >>
Roof leaks are covered under all perils homeowners insurance policies if the leak was caused by an act of nature. Acts of ... Read Full Answer >>