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Documents you need when disaster strikes

Satellite view of hurricane over Florida | NASA/Getty Images

Adelaide Zindler says when fire swept through her San Diego neighborhood in the wee hours one morning, the first thing she thought of was to go and rouse an elderly neighbor. The last thing on her mind was the financial records she left back in her own house.

"I was thinking family and I was thinking friends and I was thinking safety," Zindler says.

Uprooted from their home for days, and unsure where other relatives were, she and her husband needed a couple of months "before we got to a place where we were thinking about paperwork again," she says.

By that point, they were late on their mortgage payment. The financial institution was unforgiving, and the couple's credit score took a hit.

The Zindlers' went through money woes that are common when lives are abruptly turned upside down because of a disaster. But it doesn't have to be that way.

Financial advisers say people who identify and prepare key documents long before calamity strikes can avoid unnecessary damage to their personal finances in the aftermath of a fire, flood, hurricane or other disaster.

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Gather up these papers

All homeowners and renters should have a list of "must haves" and "like to haves" -- items they will need, or want, after a disaster, says Mitchell Freedman, founder of MFAC Financial Advisors in Westlake Village, California, and an editor of "Disaster Recovery: A Guide to Financial Issues."

Key documents to take with you include:

  • Mortgage documents or rental agreements.
  • Homeowners, renters and automobile insurance policies.
  • Financial statements and account numbers.
  • Copies of prescriptions for medications.
  • Tax records.

Freedman also suggests having a small stash of cash at hand. If the electricity is out, credit cards won't work for purchases.

Donna Childs, a former insurance executive, was living within sight of the World Trade Center in New York when the twin towers collapsed in 2001. Hers was the only residential neighborhood evacuated, and she was kept out of her home for a couple of months.

Because of her business background, Childs already had all her personal and business documents scanned and stored online when she had to flee with just an overnight bag.
At a time like that, "you shouldn't be thinking about documents, you should be thinking about safety," says Childs, who later wrote the book "Prepare for the Worst, Plan for the Best: Disaster Preparedness and Recovery for Small Businesses."

Neither Freedman nor Childs recommends using bank safety-deposit boxes to store key documents. They suggest that a bank could be destroyed or inaccessible after a disaster.

Instead, Freedman uses a portable hard drive with his computer so he can grab it and go.

"It's one of the best insurance policies you'll ever have," he says.

Childs prefers using online cloud storage and sharing the password with a trusted family member or friend who can access the account in case of an emergency.

Some banks now offer virtual safe deposit boxes online, to protect documents, photos and videos.

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Have proof of valuables, too

In addition to having access to key documents, it's important to have proof of your valuables when filing insurance claims.

Michael McRaith, the former Illinois insurance director and now head of the Federal Insurance Office, says go room by room through your home, writing down the contents and making special note of things like antiques, jewelry and collectibles.

He recommends keeping one copy of the inventory at home and a second at another location, such as with a relative, at the office or in a safety-deposit box. The list should be updated periodically, with receipts kept for big-ticket items.

Having photographs or videos of your possessions is crucial, Freedman says. Without that evidence, "it's difficult to know how many shirts you had, how many pair of pantyhose a woman had."

If you need to file a claim after a disaster, the inventory, receipts, photos or videos can help verify the existence and value of your belongings, McRaith says.

If you have no home or renters insurance or are underinsured, you might claim your losses on your state and federal tax returns. Having documentation of your possessions helps provide necessary proof, Freedman says.

But the key is advance preparation. If you've made an inventory, "there's lots of peace of mind," Childs says. "That's really priceless."

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