How to Disaster-Proof Your Finances
Disaster can strike when we least expect it. Then, the question of safety can quickly turn into a question of financial security. Are you adequately covered?
Many people equate financial security as being insured. But being getting a policy is not all there is to it. Let’s look at some of the most important disaster-proofing hacks that will help you establish a solid financial foundation as safeguard against uncertainty.
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Review your insurance
If you are renting out, it’s important that you have renters insurance. A renters insurance typically provides personal property coverage that will cover for the replacement of your things if they are damaged or destroyed. This protection generally applies to common risks such as fire or theft.
Make sure you get adequate renters insurance coverage as your landlord’s policy won’t cover for your damaged properties.
Meanwhile, homeowners should see to it that they hold an adequate homeowners insurance policy. Many homeowners are content with having a policy but don’t upgrade their policies to reflect the rising construction costs or improvements.
If you’re currently holding a homeowners insurance policy, speak with your insurance provider to make sure you have enough coverage.
Furthermore, remember that your homeowners insurance does not cover for special disasters such as floods or earthquakes. If you live in areas that are near fault lines or situated in a valley, consider buying a separate policy that covers for these disasters.
If you want substantial coverage for the contents of your home, you’d want a replacement cost coverage rather than the actual cash value. For expensive equipment, collectibles, or jewelry, an extra coverage will be needed. You may also have to consider an additional living expenses coverage which will pay for the rent cost and other expenses when your home is rendered uninhabitable during a disaster or period of rebuilding.
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Secure a digital copy of your important financial and personal documents
During a disaster, you will not always have the time nor the presence of time to salvage all your important belongings. The loss of your personal and financial documentations would prove devastating. Recovery of these records would usually take time and effort, and would even possibly get you into trouble.
To prevent this from happening, the best course of action to take is to scan your important documents and upload them to the cloud. It’s not enough that you keep them in a storage device as you may also lose that device.
File sharing and storage sites that are free are available online (e.g. Google Drive, DropBox, iCloud, etc.) and free to access anytime. So create an account as soon as possible and store these most important paperwork:
- Family photos
- Insurance policies
- Home blueprints or surveys, if you have them
- Passports and birth certificates
- Tax and loan documents
- Stocks and bonds
- Wills and trusts
Do a home inventory
It can be as simple as taking a video of your things and uploading it to a file storage site or as comprehensive as keeping a complete list with receipts and serial numbers.
After you’ve complete these tasks, make sure to do the same routine after a time. After all, securing your finances is not a one-time job.