How to Be Financially Prepared if Disaster Strikes

When disaster strikes, it is important to be prepared. Having your finances and possessions in order will greatly reduce the stress and disorder created by catatstrophes such as fire, floods, earthquakes and hurricanes. In this article I will offer some tips for filing claims, receiving emergency financial assistance and managing your money in the event of a natural disaster.

Things You'll Need

• A camera to take pictures of your possessions
• An emergency cash fund
• Your receipts for major purchases

Instructions

1. Buy flood insurance; this is one the first things you should do first If you live an area that is subject to flood risk. Most policies cost anywhere from $350 to $600 per year, unless you live in a high-risk location. A good place to get quotes is FloodSmart.gov (see Resources below).

2. Keep a current inventory, complete with receipts and pictures of all of your possessions, or at least your major ones. This will greatly expedite the process of filing a claim, as well as substantially reduce the chances of a dispute from the insurance company.

3. Have an emergency fund while your claim is being processed. Keep at least 3 to 6 months of reserve funds on hand to cover expenses until your claim check arrives. Keep your important papers, such as insurance policies, tax records and critical contact information in a fireproof and waterproof place, such as a home safe or the safe deposit box at your bank.

4. Call your agent or insurer ASAP after disaster strikes (although this step may seem obvious, it is sometimes overlooked). Get the claims procedure rolling immediately. Also take pictures of the damage as soon as possible after the event has occurred.

5. Be sure and keep all disaster-related receipts for repairs and maintenance, as your insurer may be willing to reimburse you for them at some point.

6. Sign up for government assistance if you live in a federal disaster area. You might be eligible for a grant of up to $28,800 from the Federal Emergency Management Agency (FEMA) if your loss on your primary residence is uninsured.

7. Consider the option of a disaster loan from the Small Business Administration. These loans are also available to homeowners, and not just renters or businesses. Up to $240,000 is available to replace damaged or borrowed property.

8. Consider heading to a FEMA disaster recovery center. These centers are set up in disaster zones and are staffed by members of FEMA, the SBA, Red Cross, Salvation Army and other governmental nonprofit agencies.

Resources

• FloodSmart.gov