Six Tips To Minimize Financial Loss In Disaster
Certified Public Accountants are prepared to discuss tips on how to minimize financial loss
The California Certified Public Accountants have partnered with the Red Cross and IRS on Disaster issues and advise the public to follow the following six steps to minimize financial loss in the event of a disaster.
1.) Protect your property. Think about ways you can avoid or reduce property damage if a disaster were to strike again. A few ideas:
- Know where to turn off water, gas, and electric lines. Install smoke detectors.
- Clear surrounding brush and vegetation to protect your home against wildfires, install hurricane shutters on windows, use wind-resistant shingles on your roof, and secrure objects that could fall and cause damage
- If you are not sure where to start, contact your local fire department for recommendations.
2.) Conduct a household inventory. Make a list of your possessions so you can estimate their value for insurance or tax purposes.
- Include model and serial numbers. Computer software programs are available to help with this task.
- If possible, take photos or possessions or videotape them. Don't forget to photograph your property's exterior, your vehicles, and contents of your garage, closets, and attic.
- save receipts for valuable items and get professional appraisals of jewelry, collectibles, and artwork. These expensive items need to be listed individually in your insurance policy.
- Store this list in a safe place away from your home, such as a safe deposit box at a bank located away from disaster prone areas.
- Update your inventory annually
3.) Have adequate insurance. If necessary, seek special or additional coverage for fires, earthquakes, or other losses not covered by standard insurance.
- If you own a home, buy at a minimum, full replacement or replacement cost coverage. This means the structure can be replaced up to the limits specified in the policy. Even better protection, although not always available, is guaranteed replacement cost coverage. This means the policy will pay to rebuild your house at today's prices regardless of the limits of the policy. However, you must make an effort to keep the policy coverage amount current.
- Check to see if the policy covers building-code changes, and look for a policy that covers the replacement cost of your possessions, not just the actual cash value.
- if you rent, buy renter's insurance, which pays for damaged, destroyed, or stolen personal property. You also may need special insurance if you live in an area prone to floods or earth movement. Ask your insurance agent for more information.
- Finally, don't overlook the importance of wind and hail, health, disability, long-term care, umbrella liability, life insurance and flood insurance. Standard home-insurance policies don't cover flooding, but the federal government does through the National Flood Insurance Program. You may need to draw on benefits from one or all of these policies if you are ever faced with another disaster.
4.) Keep cash available.
- Stash a small amount of cash or traveler's checks at home in a place where you can get at the money quickly in case of a sudden evacuation, or if a disaster shuts down local ATMs and banks.
- Set aside extra money in an emergency fund in a bank savings account, and keep your credit cards paid off so you will have enough credit to get you through a disaster.
5.) Use an evacuation box and safe deposit box.
- Put important papers in a box that you can grab in the event of an emergency. Some items to put in the box: traveler's checks, a few rolls of quarters, negatives of important personal photographs, a list of emergency contacts, copies of prescriptions and medical records, copies of insurance policies, backup disks of critical computerized information, copies of other important family and financial records, and your safe deposit box key.
- Store original documents, property deeds and birth certificates, in a bank safe deposit box.
6.) Make an evacuation plan. Imagine that you could take only one suitcase or pack a single carload in the event of a disaster. What yould you take, how would you leave your home, where would you rejoin your family, and who would you call if you became separated?