3 Proven Ways to Shelter Your Finances in a Natural Disaster

The tornadoes and storms that rocked the Southeast and Midwest could rack up more than $5.5 billion – with a “B” – worth of insurance claims. They also killed 354 people and wounded many more.

The April 22-28 disaster “was the second deadliest thunderstorm outbreak in U.S. history,” Reuters reported yesterday. The deadliest was back in 1925.

But as someone who has survived a couple hurricanes at home and driven into several others as a newspaper reporter, I know this: Billions of dollars and hundreds of lives don’t matter as much as your money and your family’s lives. In a natural disaster, your first priority is to take care of your own.

Sadly, few folks know how to do this. And the most reliable information isn’t always available on the first page of a Google search about “natural disaster preparation.”

As a journalist, I covered hurricanes Elena, Kate, and Andrew. As a resident, I hunkered down for Wilma and Katrina. Here’s what I learned along the way…

1. Think outside of the box

FEMA has always advised keeping “important family documents such as copies of insurance policies, identification and bank account records in a waterproof, portable container.” Some insurance companies suggest storing them “in a location designed to survive a natural disaster, like a safe deposit box.”

Problem is, you can’t get to a safe deposit box right after a natural disaster because everything’s usually closed. Banks can get destroyed too – and as the FDIC says on its website, “The contents of a safe deposit box are not insured by the FDIC.”

As for keeping important papers in a strongbox at home, that’s a great idea. Sadly, I’ve interviewed more than a few distraught homeowners who either forgot to grab that box, forgot to put all their important papers in it, or couldn’t readily find it in their cars that were packed with everything else important they owned.

Solution? Keep the originals of your important documents in a strongbox or safe deposit box, but keep digital copies in a secure location within “the cloud.”

I know more than a few young families who have scanned all their documents and put them on their smart phones and iPads. I’ve also known people who have scanned documents, then emailed them to themselves. Both are clever ideas, but both may result in security issues. What I do is to store this stuff on on my free Amazon CloudDrive. You could also use Dropbox or a similar cloud storage service.

This only takes only a few minutes to do, and only a few minutes to locate. Just make sure to use a strong password.

2. Take inventory of your life

Same thing goes for this sound advice from Charles Schwab…

Take snapshots and/or write down a good description for each item of value, including clothes, jewelry, furniture, electronics, appliances, fixtures, etc. Keep the inventory along with any professional appraisals and estimates of replacement values in a safe place away from your home (e.g., a safe-deposit box or with an out-of-town relative).

Every year at this time – when the wife and I embark on spring cleaning – I take photos of our furniture, appliances, and computers. (I partly do this so I don’t have to clean as much: “Sorry, honey, I’m taking pictures!”)

As for storing these images, they go into the cloud with my documents.

3. Pack pen and paper

This might seem trivial, but I can’t tell you how often I’ve witnessed evacuees crave these items as they call insurance adjusters, family members, hotels, and other folks as they try to deal with the immediate crisis and try to rebuild their lives.

You don’t think about a pen and paper when you’re putting together an emergency kit. And even the ones for sale – like this $120 disaster backpack from Amazon – will include everything but.

Yet when I was newspaper reporter, I’d often be asked if I had an extra pen and paper I could spare. Eventually, I just took along lots of extras so I could dole them out – which always led to more interviews for me.

Do it this weekend

Take a few minutes to put a disaster plan together: one that includes pictures of your possessions and papers, preferably stored in cyberspace. Think about, then talk about, exactly what you and your loved ones will do, what you’ll take, and where you’ll take it.

It could be waste of time – or the smartest move you’ve ever made.

For more, read Is a Home Inventory Necessary? (hint: the answer is yes) and How to Replace Lost, Stolen, or Destroyed Personal Paperwork.