Preparing for Natural Disasters: Financial Tips

Natural disasters happen – they can strike without warning and have no mercy. Natural disasters such as hurricanes, floods, earthquakes, or tornadoes can force people to evacuate their homes, and even worse, they can destroy homes, property, and even take lives.

When it comes to natural disasters, most people don’t think about how they can affect your ability to conduct essential financial transactions. In addition to planning to gather your basic needs such as food, shelter, and water, you should also be prepared to deal with the financial challenges associated with natural disasters, such as paying for supplies and temporary housing if necessary. Here are some tips that will help you prepare.

What to Have Ready

Consider keeping the following documents, bank products, and other items in a secure place and readily available in an emergency:

• All forms of identification: These primarily include driver’s licenses (or state identification cards for nondrivers), insurance cards, Social Security cards, passports, and birth certificates.
• Your checkbook: Make sure to have enough blank checks and deposit slips to last at least a month.
• ATM cards, debit cards (for use at ATMs and merchants), and credit cards: Don’t assume that merchants and ATMs in areas affected by a disaster will immediately be functioning as usual. Have other options available for getting cash and making payments.
• Cash: This is self-explanatory.
• Phone numbers for financial services: These include local and toll-free numbers for your bank, credit card companies, brokerage firms (for stocks, bonds, or mutual fund investments) and insurance companies.
• Important account numbers: These include bank and brokerage account numbers, credit card numbers, and homeowner’s or renter’s insurance policy numbers. You may want to copy the front and back of your credit cards (and keep them in a safe place).
• The key to your safe deposit box.

What to Keep and Where to Keep It

After you’ve gathered your most important financial items and documents, 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. Make an electronic image of your documents so you can more easily store the information. Store your backups some distance from your home in case the disaster impacts your entire community.
• Give a copy of your documents to loved ones. Alternatively, let them know where to find the documents in an emergency.
• Determine what to keep at home and what to store in a safe deposit box at your bank. 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. What should you put in a safe deposit box? Examples include a birth certificate and originals of important contracts. What’s better left safely at home, preferably in a durable, fireproof safe? Your passport and medical care directives because you might need these on short notice. Consult your attorney before putting an original will in a safe deposit box. Some states don’t permit immediate access to a safe deposit box after a person dies, so there may be complications accessing a will stored in a safe deposit box.
• Seal important documents. Use airtight and waterproof plastic bags or containers to prevent water damage.
• Prepare one or more emergency evacuation bags. Pack essential financial items and documents (e.g., 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 kept in a secure place in your home. Periodically update the contents of the bag. It will not do you any good if the checks in your bag are for a closed account.

What Else to Consider

• 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, and 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 timeframe.
• Arrange for automatic bill payments from your bank account. This service enables you to make scheduled payments, (e.g., for your phone bill, insurance premiums and loan payments, and avoids late charges or service interruptions).
• Sign up for online banking. This also makes it possible to conduct your banking business without writing checks.
• Review your insurance coverage. Make sure you have enough insurance, including: flood, earthquake, and personal property coverage, as applicable, to cover the cost to replace or repair your home, car, and other valuable property.

To find out more about being financially prepared for disasters visit fdic.gov/consumers/consumer/news/index.htm and type in disaster preparedness in the search box.

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