Japan's earthquake and tsunami should be a loud and clear wake-up call for those unprepared for a natural disaster. Whether it's an earthquake, tornado, fire, hurricane, flood, or terrorist act, history shows that no one is immune to being part of some sort of disastrous event.
Knowing and applying disaster preparedness information can be lifesaving during a disaster. However, it doesn't end with just protecting your person; part of being prepared for a disaster is also learning how to protect your financial assets. For practical steps on protecting money and documents, see Emergency Preparedness and Financial Security.
It's often helpful to visualize yourself in a few different worst-case scenarios to determine what information and items you'd need to protect your financial assets in the aftermath. What would you do if warned that your home would be destroyed by a tornado in a few minutes? What would you do if your home remained intact after a hurricane, but left you without electricity, phone service, and/or transportation?
Emergency "grab-and-go" checklist
- Put enough cash inside your emergency bag to last your entire family at least three days. Don't dip into it until a disaster occurs and don't make the mistake of counting on an ATM or bank for cash, as neither may be operational if the power is out or the roads are impassable.
- Insurance cards, driver's licenses, passports and credit cards will most likely be needed too often to go into the bag. Keep these items together, such as in your wallet or purse, and store them in an easily accessible location.
- Keep copies of power of attorney and medical directives for family members in your emergency bag.
- Even though service outages are common during disasters, carry your cell phone, tablet, or smartphone with you, and include their chargers. Place them in an easily accessible area and make sure that you always charge them nightly. Just in case you have service but no electricity, consider adding a solar power or hand-crank battery charger to your bag.
- Store the contact information and account numbers for all your insurance policies on one of the electronic devices you plan to carry. Because you might not have power or service following a disaster, also keep a handwritten list in your emergency bag. List regular bill obligations the same way. Although many companies will overlook late payments during a disaster, they aren't obligated to offer forgiveness, so be prepared to pay bills as scheduled. Do the same for your bank accounts, retirement accounts, and investments, but guard this information vigilantly; protect the electronically stored list with a password and consider scrambling account numbers or passwords on the handwritten list.
- Let your employer know that you're safe and determine when you need to report to work. Ask whether your employer has an emergency preparedness program and how or who to contact in the event of a disaster.
- Quickly grab any safe deposit box, home safe, and post office box keys and go.
Other actions to consider
- Store important financial documents, such as insurance policies, deeds, and wills, in a safe deposit box or in a water- and fire-proof home safe.
- Consider what will happen with your income during and after a disaster. Those living off an annuity, government benefit, or pension probably won't run into problems with income flow. However, self-employed and hourly workers could find themselves relying on emergency cash or credit cards for days, weeks, or even months after a disaster.
- Keep some emergency funds available on your credit cards, especially if you don't have a cash emergency fund.
- Review your insurance policies to make sure that you're covered sufficiently for applicable disasters. If in doubt, review with an insurance agent.
- Make it a habit to never park your vehicle with less than a quarter tank of gas. It could be days after the disaster before you can obtain gas; a full tank goes a lot further than an empty tank.
Don't wait until you see a news broadcast that a disaster is headed for you to get prepared. Remember, many disasters happen with little, if any, warning. Being prepared to protect yourself and your finances shouldn't be a hard-learned lesson. For additional preparedness resources, see Preparedness for Natural Disasters.
Frequently Asked Questions
What documents should I prioritize if I must evacuate quickly?
Prioritize IDs, passports, insurance cards, bank and investment account info, powers of attorney, and medical directives.
How much cash should I keep in my emergency bag?
Keep enough cash to cover at least three days for your household, more if you live in a remote area or have special needs.
Is it safe to store account numbers and passwords in my emergency bag?
Store account numbers securely: keep an electronic list protected by a strong password and a separate handwritten list with scrambled numbers or partial details.
Should I keep insurance policies at home or in a safe deposit box?
Important documents can be kept in a water- and fire-proof home safe or a safe deposit box; keep copies with you when evacuating.
Who should I contact first after a disaster?
Contact family, then your employer to report safety and receive instructions; also contact your insurer when practical to begin claims.