The furious storms that spawned vicious tornadoes throughout the South and Midwest recently remind us how quickly life can change. Storm victims are faced with the daunting task of not only rebuilding homes but also their personal finances.
While you can't control the storms, you can control how to prepare financially for a natural disaster and what to do afterward.
"Disasters obviously take an emotional toll, causing shock, grief and confusion. And the sudden shock to your financial system can be severe," said Ted Beck, president and chief executive of the National Endowment for Financial Education. "Following a disaster you may feel panicked or helpless. But it's important to stay calm, ask for help and exhaust all resources offered to you as a victim."
Organize your important personal documents. Make front and back copies of key records you may need to prove your identity, such as your Social Security card, birth certificate, passport, driver's license and health insurance cards. Also make copies of your credit and debit cards and home insurance policy.
"Whatever you need to prove that you're you in the event that you lose everything," said Adam Levin, chairman and founder of Identity Theft 911. "You need to have this information because the quicker and more effectively you can confirm you're you, the better it is for you."
The Identity Theft Resource Center advises consumers to store important papers in a portable locked box that can be taken with you if you must evacuate or move into an underground shelter.
The center also advises you to "prepare your computer for transport or remove the hard drive and put it in your locked box." You can also back up your personal data on a thumb drive and take that with you.
Another option is to use the Internet for storage.
"It's easy and affordable to store irreplaceable items in an online vault," said Brian McGinley, senior vice president of data risk management at Identity Theft 911. "This includes special family photographs and historical, estate and trust documents."
Review your policies. Before disaster strikes, review your homeowners and auto policies for deductibles and coverage limits.
Most tornado, windstorm, hail and similar severe-weather-related losses are covered either by homeowners, renters or commercial insurance policies.
Protection from windstorm or hail damage for cars is covered under the "comprehensive" portion of the automobile insurance policy.
Standard homeowners insurance doesn't cover flooding, so you buy flood insurance separately. You can get more information about flood insurance from your insurance agent but don't wait until the last minute to buy it. Typically, there's a 30-day waiting period from date of purchase before your policy goes into effect.
Record property identification. For insurance purposes, record the model and serial numbers for big-ticket items such as large-screen TVs, audio equipment, musical instruments and other personal belongings of value.
"Photograph them as evidence of possession, and store the photos in an online vault," McGinley said.
Set up an emergency fund. Everyone should have this, natural disaster or not.
"Take steps to establish a financial cushion equal to three to six months of living expenses," said the Texas Society of CPAs. "The fund can help manage other financial crises, such as unemployment. Keep these funds in a safe, easily accessible account, and do not use it unless it's an emergency."
Also, have a stash of cash in an emergency kit at home that you can take with you in case you need to evacuate; your bank and ATMs might be damaged.
Draw up a will. If you already have one, now's the time to update it. If you don't have one, get started.
"For many people it takes a disaster to point out the importance of having a will," the CPA society said.
Also draw up financial and medical powers of attorney, which empower a trusted person to make financial and medical decisions on your behalf if you're incapacitated.
Contact your insurance company immediately. Claims are frequently settled in the order in which they are received, so the sooner a claim is submitted, the faster it will be processed, said the Texas Society of CPAs.
The advice is timely for victims of the recent storms in Texas.
"Insurance agents in the affected areas are being deluged with claims, so the quicker a policyholder can report their claim, the better," said Mark Hanna, a spokesman for the Insurance Council of Texas, which represents property and casualty insurance companies.
Inspect your property and vehicles for damage. Inventory your losses, photograph the damage and save related receipts to assist with claims handling.
It's OK to make temporary repairs to protect your property, but don't make any permanent repairs until you've talked to an insurance adjuster, the insurance council said.
"The adjuster has to be able to come in and make some assessment of what the damage is," said Rick Gentry, executive director of the insurance council. "If you start making permanent repairs, that makes that process much more difficult."
Assess your financial position. This means taking stock of the income you'll have in the days and weeks ahead as well as your expenses.
"The first step toward financial recovery is to prepare a plan for managing income, expenses, and debt," the Texas CPAs group said. "Determine whether you're eligible for disaster relief funds from federal, state or local governments. Make every effort to keep up with household bills. If this isn't possible, call creditors to explain the situation and work out a payment plan."
Protect your personal information. If you're housed in a community shelter, don't leave the items in your locked box unwatched under any circumstances.
"The good news is you have a cache of important information to help you recover," said the Identity Theft Resource Center. "The bad news is this is a tempting target for an identity thief."
Be mindful of scams. You're at your most vulnerable after a natural disaster, and con artists often will use a disaster situation to exploit victims.
"They may contact disaster victims stating that company databases were damaged, and that they need critical information to reconstruct the accounts that were affected," the Identity Theft Center said. "This is a phishing scam, whether by phone, text, or email. No creditable companies or government agency will contact consumers in this manner."
Bottom line: It's a lot to keep track of, but following these steps could save you time, money and headaches if your life is ever turned upside down by a natural disaster.
Source: McClatchy-Tribune Information Services.