The earthquake and tsunami in Japan is a raw reminder that we need to prepare for natural disaster. No matter where we live, an earthquake, hurricane, tornado, fire, flood or terrorist act can happen sooner than you think. Here is a list of what you can do to be prepared and protect your financial information and assets.
In addition to a first aid kit, a water supply, flashlights, battery-operated radio, protective clothing, and so on, you should also have a grab bag ready at your door with the following information:
- Your wallet or purse that contains your picture ID, cash, credit cards, and medical insurance cards. Have a routine place where these items are stored so you can grab them quickly and go. If you have a passport, know where it is so you can grab that quickly as well.
- A few blank cheques and a stash of cash. Put this in your grab bag, and don’t touch it for day-to-day spending. The reason: The amount of cash you normally carry probably gets low now and then, and you can’t count on being able to get to an ATM, and, even if you could, it might not work if the power is down.
- Your cell phone, smart phone, and tablet device, such as an iPad. Include the charger, but it’s also smart to have a hand-cranked or solar powered battery charger. As a matter of routine, always plug these devices into their chargers before going to bed at night, so they’re always fully charged in the morning.
- A list of account numbers and contact information for all your insurance policies, such as homeowners, automobile, earthquake, health, disability and life insurance. Put this information on both a physical piece of paper and in an electronic device such as a smart phone. You may even give me a copy to keep in your file. The reason to have it on a piece of paper? It’s quite possible that you might not have power for several days, and your cell phone battery could get used up.
- A list of account numbers and contact information for all regular payment obligations that you have, including your mortgage, rent, car, insurance, and utilities. Ideally you’d want payments to continue during the emergency, and automatic payments from your checking account are a big help. In many cases, you might get forgiveness during an emergency, but you probably shouldn’t count on it.
- Copies of medical directives and your power of attorney.
Here are a few, other, non-grab bag steps to take:
- Make sure all important documents, such as your will, deeds, insurance policies, etc., are stored in a safe place, such as a water-proof and fire-proof box or a safe deposit box.
- Now might be a good time to review your insurance policies. Determine exactly what your coverage would be in the event of possible disasters, and make changes if you find that the coverage falls short.
- Be aware of whether your income would stop during a disaster. This might not be a problem for many people who rely on a salary, pension, annuity, or government benefits. But many other people are self-employed or are paid by the hour, and income could come to a halt. Make sure you have an adequate emergency cash fund that could cover your obligations if your income was stopped for a few months.
- Keep “buffers” on your credit cards — don’t ever charge them to their maximum limit, so you’ll have funds available should you need them.
- Similarly, make it a habit to always have at least a quarter tank of gas in your car — and preferably more. Think about what would happen if you couldn’t fill up your car for several days.
Putting this all together may sound like a pain, but think about how much easier it would be if you had all of this ready if and when a natural disaster occured.