Preparing for Disasters
A natural disaster can cause a devastating blow to your finances. Use this checklist to help minimize any additional financial losses.
Protect Your Property
- Collect your important financial documents along with your valuables. You will need them to file insurance claims, pay bills and take care of family members.
- Get a visual. Take pictures and/or video of your damaged property.
- Call your insurance agent as soon as possible to find out exactly what to do and what information is required to make a claim. You can use this checklist to help prepare for making a claim.
- Separate damaged and undamaged items until a claims adjuster inspects them. Protect your property from further damage by making temporary repairs (such as putting a tarp over a damaged roof).
- Save receipts for repairs and temporary lodging to submit to your insurance company. If you are not fully reimbursed for these expenses, they may be tax-deductible.
- Keep copies of all correspondence with the insurance company and provide it with a detailed list of damaged property.
Make a Home Inventory
One thing you can do in preparation for any kind of insurance claim is to photograph or videotape the contents of your home, including the brands and serial numbers of appliances and electronics equipment. This proactive step will make the claims process much easier in the event of a natural disaster. Use the Home Inventory Worksheet to get started.
Work with Your Employer
- If you or a family member is injured, you need to begin the process of applying for any available employer-sponsored disability benefits.
- If you are caring for an injured family member, you may be able to take advantage of the Family and Medical Leave Act, which continues your employer-sponsored health coverage during this time.
Contact your Creditors
- Pay your bills on time to help maintain your credit rating. Given the circumstances, some creditors may be willing to work with you for delayed payments.
- Prioritize your bills so that you continue paying your mortgage and home insurance first. Don’t let these lapse.
- Stop paying some bills immediately if it makes sense (such as utilities and cable services that you no longer can use). Check with these creditors to find out about termination and reconnection charges.
Finally, investigate tax relief. Depending on the disaster, you may be eligible for tax deductions to offset some of your losses. Also, check out low-cost loans for cleanup and rebuilding.
Lessen the financial blow of a disaster with Disasters and Financial Planning: A Guide for Preparedness and Recovery, a comprehensive guide from the National Endowment for Financial Education (NEFE), the American Red Cross and the American Institute of Certified Public Accountants (AICPA). The Department of Homeland Security also has a website called Ready.gov to help you prepare and stay informed about all kinds of unplanned events.