According to the National Oceanic and Atmospheric Administration (NOAA), in 2013 there were seven weather and climate disaster events with losses exceeding $1 billion each across the United States. These events included five severe weather and tornado events, a major flood event, and the western drought/heat wave.
During Severe Weather Preparedness Week, at Talking Cents we will be discussing how to prepare financially for an emergency and what to do after disaster strikes.
When most people think of preparing for severe weather or any other type of emergency, they think of stocking up on essential supplies like bottled water, nonperishable food items, flashlights and extra batteries. While it’s important to have these items, it’s just as important to prepare financially.
Building an emergency fund is the first step. An emergency fund will help you remain on track financially in the event of a disaster, but it’s not the only thing you’ll need if an emergency or disaster displaces you for more than a few days. Take these steps to make sure you can weather the storm financially.
You should always have an emergency financial kit ready and easily accessible. It is recommended that your kit include copies (front and back) of the following items:
- A list of all important contacts – think not only family and friends, but also financial advisors, lawyers, service providers, schools, etc.
- All personal identification – passports, licenses, Social Security cards, military IDs, birth certificates/adoptions papers, and marriage certificates for all family members
- Emergency cash – Withdraw a portion of your emergency fund and keep the cash in your financial emergency kit in case banks are closed and ATMs do not work.
- Medical information – copies of insurance cards, blank claim forms, and a contact list of doctors, pharmacies, hospitals, etc.
- Insurance information – copies of all insurance policies including homeowner’s/renter’s, auto, life, disability, and health
- Financial information – list of account numbers, passwords, websites, phone numbers for your bank, credit card, investment, and mortgage accounts. Also include list of all payment obligations including mortgage/rent, utilities, credit card debt, and any other loans
- Legal documents – copies of your will, power of attorney, healthcare proxy, real estate deeds, previous year tax returns
The Identity Theft Resource Center recommends storing important documents in a portable locked box that can be easily carried with you and that is both waterproof and fireproof. You should not reveal the location of your emergency financial kit with anyone except those you trust with your personal information.
You should also review all of your insurance policies for deductibles and coverage limits. But, remember that there is usually a 30-day waiting period from purchase before your policy goes into effect.
Lastly, take a household inventory for insurance purposes in the event of a disaster. As you take inventory of all of your possessions, take pictures of big-ticket items such as electronics, jewelry, and any other items of value. Download ACCC’s Financial Workbook here for a free Household Inventory Worksheet.
For more help planning for a disaster or emergency, visit ACCC’s Budgeting for Emergencies center.
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