It’s not something we want to think about — our home destroyed by some natural Disaster such as a tornado, hurricane or fire. But these things do happen. If it can happen to others, it can happen to you. The most important thing is the safety and survival of your family, but don’t disregard the financial impact a natural disaster can have.
Most likely, you have Insurance, but have you ever thought about what you would do in the event of a disaster? What will your insurance cover? How much of the financial impact will be your responsibility? Do you have enough money if this should happen? Here are a few proactive steps that will limit the amount of money you lose in the event of a disaster.
Protect Important Documents
Know where your important documents are and make sure they are protected. There are fire-proof and water-proof lock boxes and safes available. Consider adding some emergency cash along with your insurance policies, birth certificates, social security cards and the like.
Use a Safety Deposit Box for wills, titles to your cars and homes, powers of attorney and inventory of your valuable possessions. Keeping these items at a bank instead of your house will increase the likelihood that they will still be intact if something happens to your home. In the case of a tornado, your fire-proof, water-proof safe may get blown miles from your home.
The documents might be protected, but you may never get them back.
Know Your Insurance
Make sure you’re properly insured. Paying for insurance can feel like paying for nothing, but, if your home is destroyed, you’ll be thankful you have it. The better the coverage, the less money you will have to pay out of pocket. Consider purchasing a “guaranteed replacement” policy, which covers the cost of replacing your home at current prices.
If you rent, purchase renters insurance to cover the replacement cost of your possessions if they are damaged or stolen. It covers your liability in the event of an accident and affords you temporary housing in case you must vacate your rental property.
Familiarize yourself with your insurance policy so you know what is and isn’t coming to you if you must file a claim. Higher deductibles save money on premiums, but you are responsible for a higher amount of the repairs when a claim is filed.
What type of damage is covered? Some policies don’t cover floods or earthquakes, so make sure you have adequate coverage relative to what kind of weather you have in your area.
Are your possessions covered by your policy? Do you know their value? Make an inventory of your most valuable possessions and what they are worth. Expensive jewelry should be appraised, and the appraisal should be stored in the fire safe box or safety deposit box.
Make a spreadsheet on your computer and list every item you can and how much it is worth. Consider making a walk-through video of your home and possessions. This can be much more efficient than writing them down, but both may be necessary. Store the video and spreadsheet in the cloud and not just on your computer. If the computer is destroyed, so is all of your documentation and evidence.
Make a Plan
Do you have a plan in case you need to evacuate? Do you know where you would go? You may not have a choice. Sometimes you have to leave in a hurry, and you are lucky to just be alive. If you have time, bring your emergency cash, important documents, your identification, credit cards and medical insurance cards.
Set up an emergency fund. Put aside a set amount of money each month and put it in an account that you don’t touch. Try to put aside 10% of your income until you have three to six months of living expenses saved up. If this isn’t possible, stick to whatever amount you can afford.
Know Your Claims Process
When disaster strikes, your first thought is to account for everyone and get everyone to safety. When things calm down, file a claim with your insurance company. Contact your insurance provider. They will direct you through the process. Prepare to provide as much information as possible.
Your insurance agent might need to direct you to a restoration insurance provider. These are professionals contracted by your insurance company to repair, replace and restore your house and belongings.
They will need your spreadsheet of possessions and/or video you have made. The more thorough you document your items, the better chance you have of getting them replaced by your insurance company.
You don’t want to spend your life thinking about losing your home and possessions, but it can happen and does happen. Be as prepared and as knowledgeable as possible in the event of a disaster. The more you know and the more prepared you are, the less money you are likely to lose after a disaster.
Scott Huntington is a writer from central Pennsylvania. He enjoys working on his home and garden with his wife and 2 kids. Follow him on Twitter @SMHuntington