July-Aug 2020

From FPA Five Steps to Limit the Financial Damage from a Natural Disaster By Financial Planning Association® A MAJOR EARTHQUAKE in Alaska. Devastating wild- fires in California. Costly losses of life and property pro- vide Americans with a billion-dollar reminder of just how important it is to take steps in advance to prepare and protect their assets from the calamitous climate, weather and natural events that are battering the United States and other countries with increased regularity. Globally, the frequency of natural disasters—earth- quakes, storms, floods, droughts, etc.—has quadrupled since 1970 to more than 400 per year, reports PreventionWeb, an arm of the United Nations Office for Disaster Risk Reduction. And the U.S. is consistently among the hard- est-hit countries. For example, the epidemic of wildfires that swept through parts of Southern California in 2018 is expected to result in total economic losses approaching $400 billion, according to AccuWeather. If you’re among the millions of people who live and work in areas that are susceptible to natural disaster, the choice is simple: Prepare ahead of time to protect your assets, both tangible and intangible, or live with the very real risk of losing things you cannot afford to lose, with little recourse for replacing them. Because, while you may not be able to escape a natural disaster, you can take steps to limit the damage, financial and otherwise, that it inflicts upon the things you value. Those steps include the following. Inventory Maintain a thorough, up-to-date inventory of your home and its contents. This is mostly to document your personal property in case it’s damaged or destroyed and you need to make an insurance claim to replace it or recoup its value. Anything of value—electronic and com- puter/home office equipment, furniture, jewelry, etc.— should be logged in the inventory. Be sure to include the serial number, purchase price, model number and the like, or if those don’t apply (such as with a piece of jew- elry or a one-of-a-kind piece of art or antique furniture), provide a detailed description of the item and its origin. Support that with video or still photographic images of all the items on the list and capture the layout of the house from outside in, just in case the house needs to be rebuilt. Keep multiple hard and digital copies of the inventory, including at least one away from the home. Documents Store originals of key documents and valuables remotely. One-of-a-kind documents, like passports, birth certifi- cates, marriage licenses, previous-year tax returns, titles to your home and vehicles, are best stored off site at a bank safe deposit box. You might also use the box to store smaller valuables, such as jewelry. Digital Record Keep a current digital record/inventory of all accounts and important documents and store it off site and in the cloud. Build a single digital repository to house digital copies of the one-of-a-kind documents (passports, birth certificates, etc.). Scan those documents to convert them into digital files, and keep the digital files in the repository, along with 6 REVERSE MORTGAGE / JULY-AUGUST 2020