How To Financially Prepare for a Disaster

Derrick Stubblefield |

Natural disasters like wildfires, floods, earthquakes, tornadoes, and long-term power outages don't discriminate—they may impact anyone at any time. However, you don't need to live your life under the constant stress of expecting disaster to strike. By taking some steps toward disaster preparedness, you may gain some security that helps you set these worries aside.

Gather and Store Critical Information

The process of rebuilding after a disaster often involves a lot of documentation to make an insurance or federal disaster claim, prove your identity, or seek medical care. You'll often need photo IDs and birth certificates, insurance policies, tax statements, and medical records. By gathering this information now and putting it in a single secure location, you may be better able to access it when needed.

If you're planning to physically store these documents at your home (such as in a fireproof box or safe), make sure it's easy to add them to a "go bag" if needed. You may also be able to also store this information in a bank's safe deposit box or in a secure cloud drive.

Boost Emergency Savings

It's important to not only have some emergency savings in the bank but to have at least a small amount in small bills in a secure location in your home. This may make it much easier to buy gas, food, or other necessities if there's a disaster in your area that causes a power or ATM outage. You may also want to keep a credit card in a safe location with your important documents in case you need quick access to credit to rent a car or a hotel room.

Check Your Insurance Coverage

Generally, homeowners whose properties are covered by a mortgage are required to carry some level of homeowners insurance. However, not all required policies go far enough to fully preserve your family against disaster. Look at the replacement cost, rebuilding cost, and the fine print on your homeowner's insurance policy to ensure that you'll be covered if you're unable to live in your home for a period or your home requires major repairs.

If you're a renter, renters' insurance is often an important investment This insurance may preserve you against liability claims, damage you cause to other units, or damages to your unit or possessions. If you live in a flood-prone area, you may be required to purchase separate flood coverage to make sure your property is protected from flood damage.

Opt for Electronic Delivery

Though postal workers work in rain, wind, sleet, and snow, widespread disasters may disrupt postal service and make it tough to get your mail. By opting for e-delivery of bills and financial documents, you may ensure your bills are paid even if you're not able to access your mail right now. And by being paid through direct deposit (whether W-2 pay, government benefits, or insurance reimbursements), you may mitigate the risk of checks being misplaced or stolen.

Important Disclosures:

Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual.

All information is believed to be from reliable sources; however LPL Financial makes no representation as to its completeness or accuracy.

LPL Tracking #1-05164155