Financial Planning: Preparing for Disasters By Protecting Your Property

In part one of our preparing for disaster series, we discussed precautionary measures to protect your family in case of emergencies. 

In the event of a life-threatening natural disaster or emergency, the health and wellbeing of you and your family are paramount. Establishing a disaster preparedness plan is an ideal way to get ready for such disasters.

Protecting your life and your health is only one part of the disaster preparedness puzzle. Financial security and protecting your property from loss are other components that need to be addressed in the plan. In our last blog post, we talked about preparing a disaster plan, provided a basic checklist for emergency supply kits, and touched on protecting your income from loss in case of injury, illness, or evacuation. Today, we’ll cover other critical components of a disaster plan, particularly protecting your property and personal records. Let’s get started.

Protect Property in Natural Disasters

Natural disasters account for billions of dollars in damage each year. Severe storm events, such as hurricanes and tornadoes, as well as other events like earthquakes, forest fires, and mudslides can damage or destroy people’s homes, vehicles, and places of business. Naturally, if you want to be prepared for a natural disaster, protecting your own property makes a lot of sense.

First off, everyone should get in the habit of testing smoke alarms and carbon monoxide detectors on a monthly basis. All homes should have fire extinguishers as well, and those also need to be checked on a regular basis. Some of the disaster-preparedness steps to protect your property are disaster-specific, and include:

Hurricanes/typhoons/tornados – take the extra steps of having your home anchored to its foundation and hurricane-resistant roof strapping installed to help protect against wind damage. Invest in storm shutters, or have plywood window shutters cut to fit and ready to go when storm season approaches. To further protect property against wind damage, secure outdoor furniture, toys, and things like grills if a storm warning is issued. Move these items inside the house or garage to prevent them from costly damage to your home.

Flooding – if you live in a flood zone or flood-prone area, invest in flood insurance. Also, check properties carefully before buying to make sure they’re not in a floodplain. If the area where you live frequently floods, consider moving air conditioning equipment, electrical panels, and furnaces to an elevated area, such as to upper levels of the home. Another step to take is if a flooding event is expected, move your vehicles to higher ground to protect them from water damage.

Wildfires – to protect your home (many people’s largest investment), consider adding fire-resistant siding and roofing. In areas that experience wildfires, keep all brush trimmed and away from the house, including any trees or tree branches that may overhang the roof.

Earthquakes – retrofitting an existing home to be earthquake-resistant can be difficult. New construction, on the other hand, can be made resistant to all but the most severe quakes. In the home, secure doors and cabinets with child-resistant latches. Heavier furniture such as bookcases, hutches, and tall items can be secured to walls with bolts to prevent them from tipping and causing damage or injury.

Protect Personal Records from Loss or Damage

Your personal records help define who you are and provide important proof of many factors in your life. Personal records include:

  • Birth and death certificates
  • Marriage licenses and divorce decrees
  • Wills and testaments as well as trusts or other estate-planning documents
  • Income tax records
  • Insurance policies such as life, automobile, and homeowners
  • Property deeds and mortgage papers
  • Car titles
  • Stock and bond certificates and banking records
  • Passports, Social Security cards, identification cards
  • Military records
  • Child custody agreements

As you can see, there are many documents that need protection from loss.

Many banks offer inexpensive safety deposit boxes for a nominal annual fee. For $40 or $50 a year, your personal records can be protected, giving you additional peace of mind in an emergency. Home safes are also a good choice. Safes don’t need to be fancy; instead, fire resistance and waterproof construction (in flood-prone areas) tend to be important factors when choosing a safe for the home. It is useful to know that if you should die, banks may temporarily seal your safe deposit box. Keeping your will there is not a great idea; instead, your attorney may be able to store the original copy for you in a safe place. Always keep a photocopy of your will with your personal papers.

Make photocopies of all personal documents and keep those copies in your disaster supply kit. Paper copies should be protected inside a ziplock bag to prevent against water damage. You may also consider digitizing the copies and storing them on a keychain thumb drive or a CD. Again, keep these copies in your emergency kit so you will have them if you need to evacuate your residence.

Don’t Forget to Protect the People You Love

You’ve got your disaster supply kits set aside, and you’re ready with a disaster plan should an emergency arise. Don’t forget your loved ones in this process, particularly in regards to their financial security if disaster strikes. Several important legal instruments offer this protection, and include:

Your will – if you have dependents, such as a spouse and/or children, a will establishes how your assets will be distributed when you die. Without a will, state laws and probate courts will decide how your financial assets are distributed, and this process may take months.

Advance directives – if you should have a life-threatening injury or illness and cannot communicate, an advance directive, sometimes referred to as a “Living Will”, can protect you. This document spells out the types of medical treatments you wish to or don’t want to receive if you are incapacitated. You can also name another family member to make important medical decisions about your care if you cannot do it on your own. This is called a durable power of attorney for health care or health care proxy.

Powers of Attorney – this legal document allows you to name someone else to make important decisions on your behalf. For example, if you become incapacitated, your named person can make financial decisions, buy or sell property, or pay your bills for you.

In any of your legal documents, keep your beneficiaries current. Circumstances may change, and these named beneficiaries, such as in life insurance plans or retirement accounts, will override the instructions in your will.

With these steps, you are ready to weather any disaster, whether it be natural or manmade. Keep your emergency supplies and legal documents current, have a plan and stick to it if an emergency should arise.

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