By Steven C. Merrell
The wildfires that spread through large areas of Monterey and Santa Cruz counties this past summer were stark reminders of how fragile our lives really are. Disasters can strike quickly and without warning.
But careful preparation can help you stay clear-headed when the unthinkable happens. Here are some simple things you can do to protect yourself, your family and your financial life when disaster strikes.
First, plan on how you will deal with a disaster. Your plan should answer questions like, where will I go for shelter? What is my best evacuation route? What is a good alternate route? How will I communicate with my family? Do members of my family have special physical, medical or dietary needs? If so, how will I ensure their proper care? What will I do with pets or service animals? How will I retrieve children if they are in school?
Write your plan down and review it with members of your household. Your plan can take many forms. For example, you might create an evacuation checklist that includes a list of what to take and where your family is to meet. You might also put together a “go bag” of items you might need, such as a change of clothes, a jacket, a flashlight with batteries, water and energy bars.
Second, create an emergency file containing the information you would need if you were forced to leave your home. Include copies of your vital records as well as proof of medical insurance, financial information, medical information and contact information for friends, family, doctors, financial institutions, and employers.
Vital records include copies of birth certificates, adoption records, marriage certificates, passports, driver’s licenses, property deeds, leases, titles, and insurance policies.
Financial information includes a list of bank account numbers, investment account numbers, copies of the front and back of credit cards, and retirement account information. You should also include information about liabilities, such as mortgages and outstanding credit card balances.
Your best bet to keep the original documents secure, yet accessible, is to get a fire-proof safe. Look for one that is UL rated “350-1 hour” or better, meaning it is rated to keep the internal temperature below 350 degrees for at least one hour.
In addition to the physical documents, it is a good idea to scan these documents and store them securely in cloud-based storage like DropBox or an electronic vault. Check with your financial advisor to see if they provide an electronic vault service. If that isn’t an option for you, a small thumb drive will work, though security could be an issue. If you use a thumb drive, make sure to encrypt the drive or password protect your documents.
Your file can also include digital photographs of your home and your possessions. These photographs will be invaluable to you in the event you need to file an insurance claim.
Finally, if you own a home, take a close look at your homeowner’s insurance policy and understand your coverage. Most homeowner policies will cover the cost of shelter if you are required to evacuate by order of a governmental agency. However, your policy will have limits and requirements. Make sure your disaster plan fully considers those limits and requirements.
If it has been a while since you had a conversation with your insurance agent, take time to do so soon. Many national insurance companies are reconsidering their exposure to California fire risk and have failed to renew policies in high fire risk areas. If you live in such an area, start now to look for alternate coverage “just in case.”
Also, make sure your insured amount reflects the increased market values in your neighborhood. If it doesn’t, you may be under-insured. Check with a contractor to see what it would cost to rebuild your home and, if necessary, increase your coverage to that amount.
Steven C. Merrell is an investment adviser and partner at Monterey Private Wealth Inc., in Monterey. Send questions concerning investing, taxes, retirement or estate planning to Steve Merrell, 2340 Garden Road Suite 202, Monterey 93940 or email@example.com.