Getting Finances in Order Before the Next Emergency
Use this checklist to make sure your home finances are covered and protected.
1. Review Your Insurance Coverage
The day after a disaster is the worst time to discover you don't have all the insurance protection you need. Review all of your coverage and be mindful of these often-overlooked needs:
- Flood protection. Homeowners policies don't cover floods. To protect yourself, you'll need a separate flood insurance policy. The good news? It may cost as little as $129 a year. Learn what else isn't covered by your homeowners policy.
- Valuable personal property. Homeowners policies usually provide only limited theft coverage for certain valuable items, such as jewelry, firearms, furs and silverware, and don't cover things that are lost or accidentally damaged. To round out your protection, consider valuable personal property insurance.
- Renters coverage. If you're leasing your home or apartment, your landlord generally has no responsibility for replacing your possessions if there's a fire or other disaster. For as few as 10 bucks a month, you can protect your own stuff with renters insurance.
2. Take an Inventory of Your Personal Possessions
Without looking, most people couldn't list all the items in their living room ... much less their entire home. Make a written inventory now so you'll know exactly what's been lost later. For even greater detail, supplement it with a video inventory made by touring your home with your camera.
Store your inventories in a safe place away from your home — such as a safe-deposit box — and keep a copy of the written inventory at home for reference. Update both of them at least once a year or whenever you make a major purchase.
You can download free home inventory software from the Insurance Information Institute.
3. Keep Your Cash Flowing
Whether a disaster affects your entire region or just your home, you'll want to ensure money can keep flowing in and out of your bank account if you're displaced.
- Bills. Set up automatic payment plans to ensure you pay your obligations on time. Just be sure to pay the balance in full each month.
- Deposits. Sign up for direct deposit of your paycheck, pensions and other income, and familiarize yourself with applications that let you deposit checks using a computer or a mobile device. Learn more about using your mobile device to persevere through disasters.
- Hard cash. Since catastrophes can knock ATMs out of commission, it's a good idea to withdraw an adequate amount of cash — at least $200 — before a disaster happens. Since some of your expenses may be reimbursable by insurance, get receipts for any disaster-related cash purchases.
4. Build Your Emergency Fund
Financial planners recommend having an emergency fund equal to at least three to six months' worth of your regular ongoing expenses. Ideally, this money would be kept in a safe and easily accessible place — like a savings account. For a backup, make sure you have a credit card with at least $1,000 of available credit.
5. Fortify Your Castle
The Institute for Business & Home Safety provides guidance on strengthening your home against a broad assortment of risks.
6. Have Your Policy Information Ready
In case you need to report a claim, write down your insurance company's phone number and store it in your cell phone.
7. Safeguard Your Records
Keep your important paper documents in a safe-deposit box or store them online so that they are available to you anywhere you have Internet access.