Financial Planning for Disasters

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FDIC Consumer News – Winter 2005/2006 – Fires, Floods and Other Misfortunes


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Fires, Floods and Other Misfortunes: Are You Prepared Financially?

Disasters can impair your ability to conduct day-to-day money matters. This guide can help you plan appropriately.


What to Keep Where


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. 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.


Also, because a disaster can cover a wide area, "it's often best to store backups some distance from your home, even in another state," said Michael Jackson, an Associate Director of the FDIC's Division of Supervision and Consumer Protection. "Leaving your only copy at the next-door neighbor's or even across town is probably not a good idea."


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 come to mind because you might need these on short notice. Consult your attorney before putting an original will in a safe deposit box. That's because a few states do not permit immediate access to a safe deposit box after a person dies, so there may be complications accessing a will in a box.


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. Also periodically review the contents of the bag to make sure the contents are up to date. It won't do you any good if the checks are for a closed account.


Make sure each evacuation bag is waterproof and easy to carry, and that it's kept in a secure place at home. "Remember, you're putting very valuable items into a bag that's intended to be easy for you to carry away in a disaster, not for a thief to carry away in a robbery," warned William Kmetz, an FDIC official who specializes in security issues.



Winter 2005-2006 | What to Have Ready | What to Keep Where | What Else to Consider | Final Thoughts


FDIC Consumer News is published by the Federal Deposit Insurance Corporation


FDIC Consumer News is produced quarterly by the FDIC Office of Public Affairs in cooperation with other Divisions and Offices. It is intended to present information in a nontechnical way and is not intended to be a legal interpretation of FDIC or other government regulations and policies. Mention of a product, service or company does not constitute an endorsement.


Find current and past issues of FDIC Consumer News at http://www.fdic.gov/consumernews. Refer to this same index to locate the issues that are specially formatted for being reprinted in any quantity.


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Last updated on 2/02/2006

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