With Hurricane Irene striking us, I believe everyone will agree with me that natural/man-made disasters can create havoc in our lives unexpectedly. When such a natural disaster strikes us, we tend to think about our family, friends and our safety and security. People hardly think about safeguarding their financial documents. However, financial advisers insist everyone to identify as well as prepare key documents long before calamity strikes and stay away from needless damage to their personal finances.
What are the key financial documents that you need to safeguard?
- Financial statements and bank account numbers.
- Mortgage documents, if any.
- Rental agreements, if any.
- Tax records.
- Insurance policies (Homeowners, renters, automobile, etc.).
- Prescriptions for medications.
Apart from these, it's also important to stash small cash at hand, apart from your credit cards. These documents and the cash can be kept in a small bag in your cupboard so that you can take it out quickly while leaving your home when disaster strikes.
Why not store the key financial documents in banks?
Storing the key financial documents in the safety-deposit box of your bank is not a good option because the bank could be destroyed or become inaccessible after the natural/man-made disaster. If you wish, you can save those documents in a portable hard drive which you easily grab and run.
Is it important to have proof of the valuables?
Yes, it is very important to have proof of your valuables in addition to safeguarding your key financial documents. This will be of great help to you when you file your insurance claims. While you collect the proof of your valuables before the disaster strikes, keep one copy of the inventory at home and a second at another location, may be in a safety-deposit box. You should also have photographs or videos of your possessions.
If you have no insurance or if you're underinsured, then you can record a loss on your state and federal income tax forms.