Take these Steps to Mitigate the Impact of Emergencies and Natural Disasters on your Finances
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As Los Angeles residents are shellshocked and reeling from the destruction wrought by the fires, our hearts go out to those who have lost property and loved ones. The devastation is unfathomable and tragic for so many reasons. Homes, businesses, schools, libraries, and all kinds of personal property has been destroyed, leaving only memories. The communities will rebuild, but it is beyond comprehension at this point to know where to begin.
When this kind of disaster strikes, it can destroy or significantly impair someone’s finances. There are some financial planning practices we recommend people implement -- both in advance of a potential disaster and while one is coping with a crisis:
ORGANIZE AND CONSOLIDATE
First, consolidate your financial records and legal documents electronically, instead of having them scattered, even if they are stored safely in different places. Having them together will save time and angst should you need to access documents quickly. For example, we provide a cloud-based document vault for our clients. We can quickly access clients’ estate planning documents, deeds, titles, life insurance contracts, legal documents, etc. If you do not have access to something like that through an advisor, you can create your own cloud-based storage space to make sure electronic copies of your documents are stored securely together. While different professionals such as your trust attorney and your insurance agent may each have copies of your important documents, it behooves you to have them stored together in one place for more efficient access.
MAKE SURE YOU ARE PROPERLY INSURED
Consult with an insurance professional to determine if you are properly insured before there is a fire or storm. It is going to be more difficult and expensive to obtain property insurance in states like California where fires have occurred, but an experienced insurance professional should be able to provide guidance and options. It can be tempting to skimp on health, automobile, and property insurance to save on premium costs and simply meet the bare minimum requirements. Not having enough coverage will cost you exponentially more should disaster strike than paying more in premiums would have cost you. You want to strike a balance between having good coverage without paying more than you can afford in premiums, and a good insurance agent can help you sift through the different considerations.
BE CAREFUL WHOM YOU TRUST AFTER AN EMERGENCY OR NATURAL DISASTER
After a devastating event, unscrupulous and disingenuous people may appear to take advantage of the situation and of people’s vulnerabilities. Make sure you do not provide any sensitive information over the phone. People may present themselves as claims adjusters, attorneys, state officials, etc., and request social security numbers or other information. Fraud is rampant after a natural disaster. Stay vigilant so you will not fall prey to fraud. Try to remain calm because a panicked state of mind can lead you to make snap decisions that you will later regret. Take your time in making financial decisions after devastation and do not let anyone pressure you into agreeing to something while you are not doing your best thinking.
There are many kinds of emergencies that have major financial implications—an unexpected health crisis, a fire, a hurricane, etc. Even a failed relationship or divorce can find you facing a new set of living circumstances and a reduced budget. You can navigate emergencies and make good decisions if you stay as organized as possible, manage risk in advance through insurance, and remain calm under pressure. Contact us to discuss whether you are properly positioned to contend with any set of exigent circumstances that may arise. We will do all possible to ensure you are protected.