Minimize the Impact of a Disaster
A fire or other disaster requires preparation and planning. While insurance may cover many of the costs it is difficult to recover the full amount due without proof. You should consider creating a disaster kit.
The easiest part of a kit preparation is the making of lists. Prepare a list of your bank accounts, investment accounts, credit card numbers, stocks, bonds, and other investments you personally hold. The list should include contact information and phone numbers in addition to the account numbers.
The next step is to warm up a photocopier. Make copies of all titles; birth certificates; passports; driver's licenses; home deed, title, and escrow closing documents; wills; trusts; five years of tax returns; appraisals; and papers on any major purchase. Additionally, you should copy the cover sheet of all insurance policies to prove coverage and number.
The fun part of putting your disaster kit together is making a video of your home inventory. Video cameras are readily available, if you do not own one borrow or rent one. You must tape everything you own and explain what it is, how much you paid, and when you got the item. Open your closets and drawers and count how many pairs socks you have. Start in the attic and work your way down to the basement. Video tape the entire outside of your home and describe the landscaping, fencing, etc. you added to your home. Pan the camera slowly and replay the first few minutes to make sure you are telling the camera everything about each item. Do not forget to tape the ceiling. Cannot find a video camera to borrow? Make photographs of all parts of your home and then write down the information about each item.
Experts tell us that the loss of family photos is often the most distressing loss. With today's computer one option might be to scan all of the photos on to a CD. This is certainly an inexpensive method and efficient to make copies. You may have a teenager in the neighborhood with the right equipment and he would enjoy copying all the photos. Another option is to separate the photos from the negatives. Put the negatives in your disaster kit and leave the photos in your home.
The disaster kit offers a two way protection. Firstly, keep the kit away from your home. Put a lock on the box and keep it at a relative's home or with a neighbor. Secondly, during a natural disaster all the paperwork you need is in one box which you can easily take with you. Make an additional copy of everything and keep it in your safe deposit box. Update your disaster kit twice a year on January 1 and July 4.
You should consult a tax professional when applying any of these suggestions regarding a disaster kit