What would you do if an emergency or disaster were to strike in your home or community tomorrow? Many people are at a loss when suddenly their normal day routine is disrupted or turned upside down by a trauma, disaster or a loss of a loved one. This type of an event can leave you angry, confused and even cause fear. It can leave you financially at a loss. The following are some tips on how to prepare yourself to minimize the loss and to get you back to normality.
BEFORE A DISASTER
Make a list of all items in your home or on your property. Take photographs or video of these items and store the pictures and video in a safety deposit box away from your home. Remember to update photos or videos every year or when you purchase a new item.
Make sure you develop a disaster plan, which will help you respond to all hazards. Contact your local emergency management or local Red Cross for assistance.
Make sure you have homeowner's or renter's insurance. Find out before hand what is covered i.e. floods, sewer backup, fires, etc.
Listen to your local Emergency Service Officials for any emergency alerts, warnings or evacuations.
SAFETY FIRST
Make sure that Emergency Service Personnel say that it is safe to re-enter your residence. If it is, remove any valuables.
Stay cautious of potential hazards. Make temporary repairs to prevent further damage such as, patching a roof, boarding up windows or tearing down walls.
Keep receipts of all repairs, since most insurance companies will pay for them. Your local Red Cross may assist in helping you obtain materials to make temporary home repairs after a disaster.
Notify your insurance company of your loss and get advice about making emergency repairs.
Ask them if they will pay for living expenses, such as a motel, food and laundry, if unable to live at home. If you do receive a payment find out if this gets reduced from the amount you may ultimately receive from them.
CONDUCT AN INVENTORY
Make a preliminary list of all damaged property and the degree of damage to each item. Take photographs, videos, etc. of the damage.
Check this list against any list of property and possessions you may have made before the disaster occurred.
If a pre-disaster inventory list was not developed, make one from memory and observation as soon as possible.
Ask family or friends for videos they may have taken of your home.
Draw floor plans and sketches of your homes interior. Repeat this process in two to three weeks. You may likely remember additional items.
Collect all available receipts, cancelled checks, credit card statements, and invoices to prove the value of lost possessions, including big-ticket items such as jewelry or antiques.
Do not consider your list final, you may remember additional items later.
By conducting an inventory you are making sure your insurance company pays you fairly for all covered property and possessions damaged or destroyed in the disaster.
LOST RECORDS
Records are often lost or destroyed in a disaster. But you may need to reconstruct some of those records if you plan to file an insurance claim, take a tax deduction for your loss, or apply for government aid. Here is how you can recreate financial records and determine the value of your possessions:
Look through catalogs or want ads to establish fair value for your damaged or destroyed items. (Note: some renter's and homeowner's insurance may pay only the actual cash value for your possession, replacement cost discounted for age or use.)
Use a Blue Book (available at banks) or consult a car dealer to determine current value of vehicles.
Get a copy of escrow papers for your home from your bank, real estate agent, the title company, the escrow company or any other financial agency that handled the purchase.
Go to the local Tax Assessor Office for property tax records to determine the value of the land versus the value of the building.
Contact contractors or lenders to determine the value of home improvements you have made.
NOTIFICATIONS
Notify your employer in the event you cannot get to work due to the disaster.
Notify your creditors as soon as possible about lost bills or difficulties in paying bills. Explain the situation and try to negotiate an agreement to reduce payments or spread them out over a longer period. Most will probably be willing to do this, especially if they have other customers affected by the disaster.
Contact the utility companies if your residence is unlivable or has been destroyed so they can stop billing immediately.
INSURANCE CLAIMS
Gather together all policy numbers and insurance company telephone numbers.
Find out how the company wants to process claims. In widespread disasters most companies set up special procedures and send in extra adjusters and claims adjusters.
File claims as promptly as possible. Claims are generally settled in the order received, with most severe cases getting the highest priority.
Make sure you property is marked in the event the home is destroyed.
File a claim even if your house is not specifically covered for the type of the disaster that occurred. For example, your policy may not cover earthquakes, but may cover damage caused by fire, water and other damage resulting from an earthquake.
THIS INFORMATION APPLIES WHETHER YOU RENT OR OWN
CLAIM ADJUSTERS
Claims adjusters usually handle the more extensive losses. If this is your case, the following suggestions can help ensure the adjuster's estimate of damages is complete and accurate.
Provide the adjuster with your list of damages, but note in writing that it's only a partial list. You may remember more items later.
Fully explain all losses and be sure either you or the adjuster writes down the explanations.
Make sure to take notes of all conversations and follow up with letters to the insurance company confirming the conversations. This increases the chances for getting fair settlements.
Compare notes with neighbors and what their adjusters are saying.
Bring in additional adjusters if you're not satisfied with the initial damage estimates.
Consider using an independent claims adjuster if it is a special situation. They generally charge 10% of a settlement.
SETTLING CLAIMS
Use your list of damage property and possessions to be sure the settlement offer is fair.
Appeal an adjuster's settlement with higher management if you feel it's necessary. If not satisfactory get an independent mediator or arbitrator to settle the claim.
Do not rush to settle with your insurance company. Keep your right to file additional claims if needed later. Seek legal advice if necessary.
LOANS AND GRANTS
Numerous government, nonprofit and private loans and grants may be available following a disaster. Although not meant to replace or duplicate insurance they are available to you. Stay tuned to your local media for announcements of their availability. Some programs are as follow:
The Federal Emergency Management Agency (FEMA)
The Small Business Administration (SBA). Homeowners or owners of personal property may apply for an SBA disaster-relief loan.
Private lenders
American Red Cross disaster relief
Other voluntary organizations
OTHER TIPS
Get estimates from more than one licensed, bonded, reputable contractor. Call your local Better Business Bureau to check out a contractor.
Find out what neighbors are paying for similar work.
Write down license plate numbers and driver's license information of contractor.
Ask for contractor's licenses and building permits.
Get all contracts in writing.
If paying in cash get a receipt of work.
Check to make sure work is done according to building codes.
Do not pay more than 20% down for the contractor to begin work.
If contractor insists on payment for materials up front, then go with him to buy them or pay the supplier yourself.
You may be eligible for important tax refunds or deductions (called casualty loss deduction) or other tax benefits that are available for any property or possessions damaged or destroyed in a disaster.
You may deduct losses if the total amount of losses in one year is more than $100 and more than 10% of your adjusted gross income. Verification or proof of damage must be established and proof of property ownership must also be submitted.
Consult a Certified Financial Planner or a license tax accountant.
TAKING EVEN THE MINIMAL STEPS ADDRESSED CAN HELP MINIMIZE THE IMPACT FINACIALLY AND HELP RESTORE YOUR FINANCIAL HEALTH TO ITS NORMALCY.
FOR MORE INFORMATION ON FINANCIAL RECOVERY CONTACT YOUR LOCAL EMERGENCY MANAGEMENT OR LOCAL RED CROSS.
