Preparing Financially For Disasters

Certainly, the first concern in an emergency should be personal safety. But consumers also should be ready to deal with the financial challenges of a disaster, such as having access to cash, financial services and personal identification they need to pay for supplies or temporary housing or to conduct day-to-day money matters.

The Federal Deposit Insurance Corporation (FDIC) offers consumers guidance to preparing financially for disasters that includes practical tips on preparing financially for disasters:

• Keep important documents such as your driver’s license, insurance card, Social Security Card, passport, birth certificate, etc. in a secure place and readily available in an emergency. These documents will be crucial if you or your family should need to rebuild lost records or otherwise prove to a government agency, a bank or other business that you are who you claim to be.
• Take with you a checkbook with enough blank checks and deposit slips to last a month or so. Your need for checks will vary depending on how long you may be displaced or how often you write checks. Even if you rarely or never write checks, at least consider having a copy of a check or your checking account number handy. That's because, in an emergency, you can authorize an important payment by providing the recipient (for example, an insurance company) your checking account number over the phone.
• Have easily available to you your automated teller machine card, debit card (for use at ATMs and merchants) and credit cards: These cards give you access to cash and the ability to make payments on outstanding bills. Most ATM and debit cards require the use of personal identification numbers (PINs), so make sure you know those numbers. Don't write your PINs on or near your cards in case they are lost or stolen. Also, don't assume that merchants and ATMs in areas affected by a disaster will be immediately functioning as usual — that's why it's smart to have other options available for getting cash and making payments, as described in this article.
• Carry Cash: The amount you should have available will depend on several factors, including the number of people in your family and your ability to use ATM, debit and credit cards to get more cash or make purchases. But remember that cash in your house or wallet and not in your checking account can easily be lost or stolen.
• Keep phone numbers for your financial services providers handy: These would include local and toll-free numbers for your financial institution, credit card companies, brokerage firms (for stocks, bonds or mutual fund investments) and insurance companies. You may need to defer a payment, replace lost cards or documents, open new accounts, or otherwise request assistance. If you have people you regularly deal with, have their phone numbers on your list, too.
• Know important account numbers: These would include checking and brokerage account numbers, credit card numbers, and homeowner's or renter's insurance policy numbers.
• Don’t leave without the key to your safe deposit box: You can't get into your safe deposit box at your financial institution without your key, no matter how many forms of identification you have. Also, while many financial institutions issue two keys when a box is rented, simply giving someone else a key doesn't allow that person access to a box in an emergency. He or she also must be designated in the records as a joint renter or be appointed a "deputy" or "agent" who has access to your box. Contact your financial institution about the proper arrangements.

After you've gathered your most important financial items and documents, the FDIC recommends that you protect them as well as you can, while also ensuring you have access to them in an emergency. Here's a reasonable strategy for many people:

• Make backup copies of important documents. You'll want duplicates for yourself, but also consider giving copies to loved ones or at least let them know where to find your records in an emergency. You can make copies the old-fashioned way. But a more efficient option is to scan them onto disks, which can hold significant amounts of images and are easy to store or send to others.
• Determine what to keep at home and what to store in a safe deposit box at your financial institution. A safe deposit box is best for protecting certain papers that could be difficult or impossible to replace but not anything you might need to access quickly.
• Seal the most important original documents in airtight and waterproof plastic bags or containers to prevent water damage. Be aware that safe deposit boxes are water resistant but not waterproof.
• Prepare one or more emergency evacuation bags. Most of what you're likely to pack inside will be related to personal safety — first aid kits, prescription medications to last several days, flashlights and so on. But your emergency kit also is the place to keep some essential financial items and documents, such as cash, checks, copies of your credit cards and identification cards, a key to your safe deposit box, and contact information for your financial services providers. Make sure each evacuation bag is waterproof and easy to carry, and that it's kept in a secure place at home.

The FDIC also offers the following considerations for consumers:

• Sign up for direct deposit: Having your paycheck and other payments transmitted directly into your account will give you better access to those funds by check or ATM because you won't have to deliver the deposit to the bank or rely on mail service, which could be delayed. Note: There could be delays in the processing of direct deposits in a disaster situation but the problem is usually fixed within a reasonable time frame.
• Arrange for automatic bill payments from your account: This service enables you to make scheduled payments — such as for your phone bill, insurance premiums and loan payments — and avoid late charges or service interruptions.
• Consider signing up for online banking services: This also makes it possible to conduct your banking business without writing checks.
• Review your insurance coverage: Make sure you have enough insurance to cover the cost to replace or repair your home, car and other valuable property.