How to Disaster-Proof Your Finances

The fires burning in California and the recent hurricanes on the East Coast have begged the question: how can one disaster-proof their financial house? Often times when a disaster strikes, the last thing on our mind is to snag those important papers—our primary concern is always our life and the lives of our loved ones. But when the dust settles and the rebuild begins, those important papers are going to form the foundation of how quickly you can get your life back on track.

While most people keep their important documents in a fire-proof safe or even safety deposit boxes, those are not fool proof means to protect your things. Take advantage of the fact that we live in a digital age and save your important things off site and in the cloud.  Scan/photograph important insurance policies, passports, birth certificates, tax and loan documents, brokerage statements (or at least a list of accounts), will and trusts.  Using programs such as Apple’s iCloud, Google Drive or DropBox can save you huge hassles of trying to piece together your life on paper when recovering from tragedy.  Another important item to add to your save list are your passwords—many smart phones offer password manager applications which are efficient means of keeping track of your online access.       

From an insurance perspective, two specific items require a bit of attention. Completing a home inventory can save you huge hassles when making insurance claims. You can simply take pictures or video record your belongings, or use a number of smart-phone apps to help keep you organized. I would also suggest saving or scanning copies of receipts for any large purchases.

Secondly, and possibly most importantly, review your insurance policies (whether you rent or own). Renters should be aware that their landlord’s insurance policy will not cover loss of your belongings.  Likewise, a homeowner’s insurance policy should be updated to reflect rising costs of construction or increasing value. There are also insurance ‘riders’ that are available to assist you in making the most of your policies such as ‘extended replacement cost’ coverage or ‘inflation’ coverage or ‘loss of use’ and ‘additional living expenses’ which will pay for your living expenses should your home be uninhabitable or destroyed.  If you have questions on your insurance policies, be sure to reach out to your insurance broker or agent.