The recent wildfires in Central Texas dramatically demonstrated how a natural disaster can impact your life and property. Our sympathy goes out to those affected by these unprecedented events.
There are many steps that you can take both before and after the occurrence of a natural disaster. In this blog posting we would like to address just a few measures to consider that may help protect and preserve your personal belongings and financial security.
Here are a few precautionary measures to take now:
- Safeguard your home. Consult your insurance agent for specific actions to take that can protect your home. This may include storing combustibles, such as propane and gasoline, away from the house and keeping your home clear of tree branches and leaves.
- Protect important files and records. Store valuable documents in a fire-resistant safe or at an off-premise location such as a safe deposit box. These may include wills, birth certificates, passports, insurance cards and other legal documents. Regularly back up important computer files, including digital picture and video files, using an online backup service such as SOS or Mozy. Features and pricing vary so it is recommended to review several backup services to choose the one that is right for you.
- Take inventory of your belongings. In the event of a claim you may need to prove you owned certain items and also verify their worth. The best way to do this is to go through your house with a video camera. Walk through each room in your home, opening closets and jewelry boxes, making sure you capture an image of everything of value to you. Remember to include the attic, basement and any storage units. You can also take photos of items, including serial numbers for electronics, and make a list on paper. Be sure to keep these videos, photos and lists in a safe location away from your home or backed up online with your other computer files. Iphone and iPad apps to track home inventory are also available.
- Insure for replacement cost. There are two basic kinds of coverage for your home’s contents– replacement cost and actual cash value. Contact your insurance agent to verify that your homeowner’s policy provides replacement cost coverage for both dwelling and personal property. Replacement cost will pay for the damaged item to be replaced with a new item of similar quality. Actual cash value coverage, which is less expensive to buy, pays an amount equal to the replacement cost less depreciation.
- Consider inflation. The cost required to build a home increases each year. It is worth consulting with your agent to verify that your dwelling coverage is adequate and to request an inflation guard, which automatically increases the coverage each year. Also, be sure to factor in any improvements or remodeling you’ve done that may have added to the value of your home.
In the event a natural disaster threatens your area, here are some actions to take:
- Prepare a “Go Bag”. If a natural disaster threatens to strike in your area, it is a good idea to gather important or irreplaceable items ahead of time. This may include important documents including health insurance cards, property and casualty insurance cards, birth certificates, passports, photo identification, proof of address, as well as photo albums. Keep these documents by the door in a waterproof and portable container. Also include medication for at least one week, a list of current medications and dosages as well as doctors’ names and numbers.
- Be proactive. As soon as possible, make a thorough list of damaged items. This may help process your claim more efficiently. Document the damage with photos or videos. Provide the insurance company with a copy of your home inventory. In the meantime, don’t throw out damaged items, especially expensive ones, until an insurance company representative has had a chance to assess the damage and file a claim report.
- Know your coverage. If you have comprehensive auto insurance, your vehicle will be covered for damage, destruction, theft or vandalism. Also, vehicle contents are typically covered under the personal possessions portion of a homeowner’s policy. Homeowner’s insurance policies often cover theft and vandalism, so losses due to looting in the wake of a disaster should be paid. In the event that your home is badly damaged and requires repairs or rebuilding, loss of use coverage will reimburse the policyholder for living expenses that exceed those that a homeowner would normally incur while living in their home. Covered expenses may include temporary housing, the cost of temporary storage and moving, laundry costs, and the cost of some meals. Most policies place limits on benefits by enforcing time constraints or by restricting the maximum reimbursement to a percentage of the coverage amount on the home.
Experiencing a loss due to a natural disaster can be overwhelming. Ultimately, your personal safety and that of your loved ones is of primary importance. However, taking these steps now may make you better equipped if you find yourself faced with a natural disaster in the future.
Sources: http://www.insurancejournal.com/news/west/2007/10/23/84486.htm; http://www.insure-net.com/home.htm
