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Natural Disaster Financial Preparation Tips

The financial impact on the lives of those displaced by Hurricane Katrina cannot be overstated. There are three stages of need in such situations: the immediate, the temporary and the long-term. Each stage presents different financial challenges and requires different advanced planning. The first thing you should do to financially prepare for disaster is to have copies of your important legal documents in a safe place other than your home. This includes copies of your Will, Trusts, Powers of Attorney, and Living Will but also insurance policies, titles to vehicles, Social Security and health insurance cards and real estate deeds. As a service to my clients, I store these electronically so they can be accessed anywhere at any time. These are essential documents that may be needed in an emergency and will be invaluable should you bear a catastrophic loss. It could take weeks or months before claims are filed and settled. For events like Katrina, it is likely that insurance companies will argue over whether the damage was caused by a wind event (which is covered) or a flood event (which is not, unless you had expensive flood insurance). Some claims will likely end up in arbitration or court proceedings. Secondly, you should have access to cash to aid you both in evacuation and the immediate aftermath. When the power is out, you can`t use a credit card. If essential supplies are in great demand they will sell to the highest bidder. Third, it is important that you are able to access your investments should you need to use those funds to aid your recovery. For instance, it will take months and even years for those affected by Katrina to get their lives back in order. Some people think that because they have insurance that they won`t need access to their investments in these situations, but that`s not true.