Financial Disaster Plan

Regardless of the type of disaster that strikes, it is vital that people take financial precautions before a catastrophe hits. You need to ensure that you are protected in case of disaster and that you have a plan for recovering after the event. From protecting your financial documentation to having cash on hand, a little financial foresight can go a long way. Here are a few financial guidelines to help prepare financially in case of a disaster:

1. Safety first not only for you or your family, but for your precious financial information. Purchase an airtight, waterproof and fireproof container or safe, and store the following inside: duplicates of all key financial documents, including insurance policies, mortgage records, wills, deeds, and stock and bond certificates; a list of your financial account numbers, along with passwords, access codes or PIN numbers; and a list of your valuables along with their estimated costs and/or receipts if you have them. Store the container or safe in an accessible place and retrieve it when disaster warnings are issued.

2. Cash is king especially after a disaster. Keep a small amount of cash in an envelope in case local banks or ATMs are forced to close for an extended period. It's best to have smaller denominations so money is more usable, and also consider keeping travelers checks or a roll of quarters for smaller purchases. What about the old notion of burying gold or currency in the backyard until needed? Forget about it. You may be quickly displaced and unable to access your hiding place.

3. Have plenty of liquids. Liquid investments, that is. While having cash on hand is critical immediately after a disaster, you should be prepared for long-lasting financial impacts, such as loss of income or significant renovation or re-location costs. Having a longer-term emergency fund comprised of liquid investments that are easily accessible can be helpful for covering expenses without having to reach into retirement savings. Talk to your financial professional about best investment choices for you.

4. Photocopy your plastic. Take all the contents of your wallet including your credit cards, bank debit cards, drivers license and health insurance card and copy the front and back of the cards. Put the photocopies in your container or safe. If you lose your wallet during the disaster, you have all the information you need to make purchases, register for possible benefits or seek health services.

5. Have your critical phone numbers handy. In addition to a list of phone numbers for your friends and family, make a record of all your financial contacts, including your bank, credit card companies, insurance or mutual fund company, lawyer and financial professional. Save the list on a computer disk for back up. Again, keep this in the same container or safe.

6. Am I eligible for that? Don't count on just your property/casualty insurance for relief. Your life insurance policy, 401(k) plan or annuity may give you access to cash in the event of a disaster. Contact your financial professional and review your coverage so you fully understand the benefits under your access rights before a disaster hits, as well as know of any penalties, tax consequences or impacts of withdrawing money from your long term plans. Also, many companies have traditionally offered extensions on grace periods for premium payments for policyholders in disaster areas, so check to see if your company has done that after a particular natural disaster.

7. Don't talk to strangers. Remember that advice as a child? A crisis brings out the good and bad in people. Be wary of any scams that promise quick access to relief funds. Do not give your bank information, credit card number or Social Security number to anyone except representatives of known and trusted financial or governmental institutions. And always ask for identification as proof.

Most importantly, bear in mind that the time to act is now, well before a disaster strikes.