Preparing Your Assets for Potential Disaster

photo credit: dan taylor

You can never predict when a hurricane, earthquake, fire or other disaster is going to hit - but you can predict that they will keep occurring, somewhere in the world. And that’s why being prepared for disaster is not just a matter of having an escape plan but also making sure you won’t be financially devastated.

Two main strategies are important for making sure that a natural disaster doesn’t translate to a financial disaster:

1. Make sure your insurance is appropriate. Check that your insurance policies will cover the actual cost of replacing your home and its contents, should disaster strike. Problems in the past have included people having insurance that covered mostly just the land value rather than the home on it as well, and people with “cash value” replacement policies that didn’t provide enough money to replace goods with new, today’s prices versions. It’s also important to check what exclusions are on your policy (for example, flooding) and add additional insurance for events that are possible in your area.

2. Keep important financial documents in a safe place. Savings bonds and cash, for example, might be an important part of your wealth, but if they’re simply being stored at home in a cupboard then they are at serious risk in an emergency. Experts recommend storing important documents in fire-safe boxes and as scanned documents on a thumb drive - preferably two, stored in different locations. If you have copies of such documents (including identification, for example) then re-starting your life after a disaster is much quicker and easier.