Realty Times May 18, 2006

Preparing A Financial Survival Kit
by Broderick Perkins

Another major hurricane season looms.

The Big One is due any day now.

A bird flu pandemic is possible.

Florida's already into the fire season.

And Tornado Alley always lives up to its name.

Unfortunately, natural disasters are a way of life.

If you are lucky, you'll never have to recover from one.

If you are smart, you'll make sure you can -- just in case.

While you are preparing for the survival of your family, Fido and the fragile roof over your head, don't overlook the financial life you'll also need when the rest of the world is spinning around you.

"Putting Down Roots in Earthquake Country", produced by the U.S. Geological Survey (USGS) and the California Earthquake Authority reminds us that when disaster hits home, it hits it in more ways than one.

Bank operations could be disrupted, limiting access to cash. Food, drug and retailers could be down for the count and unable to restock. Government assistance, insurance, and other financial relief -- which may or may not cover your total loss -- doesn't really amount to a hill of beans if your neighborhood is a mountain of impassable rubble.

Nevertheless, ultimately, you'll remain responsible for most if not all of your debts and other financial obligations, and as soon as disaster hits, you'll start to feel the pinch.

It won't smart so much if you are prepared.

Chase Bank, the consumer and commercial banking brand of JPMorgan Chase & Co., recently reminded those who live in hurricane prone areas that now is the time -- before disaster hits -- to get those bucks in a row.

"As many Louisiana residents learned during last year's hurricanes, financial planning can be the difference between peace of mind and heartache," said Michael Lulich, head of Chase's retail operations in greater New Orleans in a prepared statement.

Don Barnes, head of Chase's retail operations in Baton Rouge chimed in, "A good financial plan for disasters such as hurricanes should include easy access to funds, protection of personal financial information and communication with other family members."

Chase, USGS and others offer these disaster preparation tips to help save your financial life.

  • Make backup copies of all of your records. Make copies of important records and documents but secure them in a location away from your home, say in a safety deposit box or other location out of your immediate area. Items should include photos of everything you own, credit card numbers, insurance policies, financial records, tax records, loan and mortgage documents, deeds and titles, wills and trusts, Social Security cards, prescriptions and medical records, emergency contact lists and spare keys.

  • Other experts suggest using technology -- digital images and video -- to record your financial profile and assist you in keeping it in a safe place, say, online on a server out of your immediate area.

  • Compile and maintain a one-page financial contacts list. The list should include the phone numbers of companies you may need to contact as well as your account numbers. Include numbers from your bank, insurer, mortgage lender, consumer credit lender, investment company, attorney, accountant and others.

  • Maintain a fireproof and waterproof box or container with important recent financial documents you can quickly grab should you have to flee. Include recent checking, savings, credit card and investment account statements; your key financial contacts list; federal and state tax returns; mortgage and insurance information; your Social Security card; and a supply of cash, traveler's checks and a roll of quarters for pay phones.

  • Ensure you have access to cash. Carry your ATM or debit card with you at all times. Build an emergency balance in your checking or savings account to tap when a crisis hits. Consider applying now for an emergency line of credit, say a home equity line you don't use until necessary. After disaster hits, if you become unemployed, or if the lender can't verify your employment, you may have an equity windfall you can't tap.

    Likewise consider overdraft protection, linking your checking account to a savings account or credit card. Using direct payroll deposit also makes it easy to access your income should your employer continue to pay you after a disaster, even if you can't make it to the workplace or have no address where you can receive your checks.

  • Create and keep a budget. Knowing how much you spend each month for housing, food, gas, medicine, and other basic expenses will be helpful if you need financial assistance from a nonprofit or government agency. Determine what "living expenses" will cost if you need to stay in a motel or other accommodations for an extended period of time.

  • Review your home owner's or renter's insurance policy with your insurer. Consider a "guaranteed replacement" policy to protect your home at today's rebuilding costs. If you are in certain high risk areas, consider adding flood or earthquake insurance. Renters should carry policies that insure their belongings. Home owners who live in communities governed by home owner associations should likewise cover belongings as well as special assessments and for any portion of the structure for which they are responsible.

    Don't overlook special coverage necessary for computers, home offices, jewelry, artwork or other expensive items not included in your basic insurance policy.

  • Get started today.

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