The tragic loss of life and property in the Sonoma and Napa fires is a reminder of how fragile our lives really are. Disasters can strike quickly and without warning. In fact, many of our beleaguered neighbors to the north were forced to flee their homes with only the clothes on their backs.
Bill and Jennifer Kastner of Napa, who lost their home in the Atlas fire, described how they grabbed documents and pictures off the walls and fled. Bill said, “I would’ve liked to think I would stay and fight it, but with 50-mile-an-hour winds and embers flying at you, it’s just not something you’re going to survive. As soon as we got in the car…you could feel it radiating through the windows. It’s a little scary.”
Careful preparation can help you stay clear-headed when disasters hit. Here are some simple things you can do to protect yourself, your family and your financial life, should you face a disaster situation.
First, put together a checklist of the things you will need to do in a likely disaster. For example, you might have an evacuation checklist that includes a list of what to take and where your family is to meet. You might also put together a “go bag” of items you may need, such as a change of clothes, a jacket, a flashlight with batteries, water and energy bars.
Second, create an emergency file containing the information you would need if you were forced to leave your home. Include copies of your vital records as well as proof of medical insurance, financial information, medical information and contact information for friends, family, doctors, financial institutions, and employers.
Vital records include copies of birth certificates, adoption records, marriage certificates, passports, driver’s licenses, property deeds, leases, titles, and insurance policies.
Financial information includes a list of bank account numbers, investment account numbers, copies of the front and back of credit cards, and retirement account information. You should also include information about liabilities, such as mortgages and outstanding credit card balances.
Your best bet to keep this information secure, yet accessible, is to get a fire-proof safe. Look for one that is UL rated “350-1 hour” or better, meaning it is rated to keep the internal temperature below 350 degrees for at least one hour.
In addition to the physical documents, it is a good idea to scan these documents and store them securely in cloud-based storage like DropBox or an electronic vault. Check with your financial advisor to see if they provide an electronic vault service. If that isn’t an option for you, a small thumb drive will work, though security could be an issue. If you use a thumb drive, make sure you password protect your documents.
Finally, take a close look at your homeowner’s insurance policy. In preparing this column, I had a very enlightening conversation with Stuart Dong, a State Farm Insurance agent in Pacific Grove. He said most homeowner policies are now written for “extra replacement cost” meaning the policy will pay up to 120% of the insured value of the home.
If your insured amount does not reflect the increased market values in your neighborhood, you may be under insured. He suggested you check with a contractor to see what it would cost to rebuild your home and, if necessary, increase your coverage to that amount.
Steven C. MerrellMBA, CFP®, AIF® is a Partner at Monterey Private Wealth, Inc., a Wealth Management Firm in Monterey. He welcomes questions that you may have concerning investments, taxes, retirement, or estate planning. Send your questions to: Steve Merrell, 2340 Garden Road Suite 202, Monterey, CA93940 or email them to firstname.lastname@example.org.