Hurricane financial preparedness

Weathering the storm
Without preparation, hurricanes and other disasters can leave your financial house in disorder, too
http://www.delawareonline.com/apps/pbcs.dll/article?AID=/20060724/BUSINESS/607240301/1003

By DWAYNE STEWARD
The News Journal
07/24/2006

With the height of the 2006 hurricane season looming, financial and weather experts warn that storm preparations should include your finances.

"Eighty-three percent of hurricane activity occurs between mid-August and about the third week in October," said Frank Lapore, National Hurricane Center spokesman. "Now is the time most should be finishing preparing their finances. Ideally, you should start well before the hurricane season, in May."

Experts suggest compiling all important personal, financial and medical records and storing them in a fireproof and waterproof safe at home and an off-site safety deposit box. The Federal Emergency Management Agency and Operation HOPE provide an Emergency Financial First Aid Kit to help with gathering all the necessary information.

"It takes a while to put together but includes everything you'll need to rebuild your finances after you've been affected by a natural disaster," said Greg Hughes, FEMA spokesman. Hughes has been in Smyrna since July 10 helping with flood recovery.

The kit, which is described at http://www.operationhope.org/, includes four key points:
•Personal household information.
•Contacts for professional advisers and health care providers.
•Checklist of important legal documents and financial statements.
•Private security/access information.

This information should be updated at least once a year, Hughes said.

Multiple copies of everything should be made and kept in safe boxes outside of the home, said Jayne Abercrombie, Wilmington Trust certified financial planner.

"The most important thing is to have back-up information. What would you need if you walked out your front door and when you turned around your house was gone?" Abercrombie said. "A better solution is to put together a package of information and send it to your sister in Kansas, if you live in New York. Have that information somewhere geographically separate."

Having accounts in brokerage money markets or money in an emergency account at a non-local back are also good precautions, she said.

Cash should be withdrawn from an emergency account and put in the safe with all important documents, which should be packed and ready to go once a hurricane watch is issued, said Dennis Feltgen, meteorologist and spokesman for the National Oceanic and Atmospheric Administration.

"You need at least a week's worth of cash to make sure you can survive, because more than likely the electricity will be out in the area and there won't be access to an ATM," Feltgen said.
A home inventory could determine how much of your property is replaced after a hurricane or other natural disaster, said Matt Denn, Insurance Commissioner of Delaware.

"Insurance companies aren't going to just give you a check after a natural disaster," Denn said. "The most important thing to have is the contact information of your [insurance] carrier and the inventory list, because that's what you're going to need to make a claim and get reimbursed quickly."

The recent flooding in Delaware hit many residents hard because they had no flood insurance.
"In Delaware, most homeowner's insurance policies cover wind damage caused by hurricanes, but they do not cover flood damage. A separate plan must be purchased," Denn said.

Experts suggest those who want to add coverage do so well before hurricane season because it takes 30 days for most policy changes to take effect.

"The National Flood Insurance Program is the best bet, but there's usually a waiting period," Abercrombie said.

Insurance companies may also change their coverage policies for new clients once hurricane season begins.

"During a hurricane season it's hard to get any insurance company to do what you want," said Dennis Barba, president of Insurance Associates Inc. of Newark. "We're getting requests for more insurance coverage every day."

Flood coverage isn't required in Delaware but is something that should be seriously considered, Denn said. "You should at least go to the FEMA Web site (http://www.fema.org/) and put in your address to see the likelihood of flooding in your area."

Lapore, of the National Hurricane Center, said: "We can expect to see active hurricane seasons for the next 10 to 20 years. It behooves you, especially coastal states, to go through this process of thinking, because the issue isn't going away anytime soon."

Greg Hughes, spokesman for the Federal
Emergency Management Agency, said the
agency's Emergency Financial First Aid Kit
"includes everything you'll need to rebuild
your finances."

COVERING YOUR ASSETS

• Make sure your direct deposits are coming through from your employer. Establish other electronic payments for bills so you're not missing payments if you have to evacuate.
• Make sure your insurance fully covers you in case of any disaster. Typical homeowners insurance doesn't cover flood damage.
• Take pictures of the contents of your home and make a complete inventory. Insurance payouts after a natural disaster are made based on an itemized list of what was destroyed. Get home inventory forms by calling (800) 282-8611 or go to www.state.de.us/inscom/home/Home InventoryForm.pdf.
• Create an emergency account with enough money to last three months. Take out a week's worth and put it in a safe right before hurricane season.
• Complete FEMA's Emergency Financial First Aid Kit and keep one copy at your home in a fireproof/waterproof box and another at an off-site safety deposit box.
• Increase the credit limit of major credit cards before hurricane season for back-up if emergency cash is depleted.
• Fill up gas tank and begin preparing to take legal and medical documents and financial statements when a hurricane watch is issued. Doing so once a hurricane warning is in effect might be too late.

ACTIVE HURRICANE PERIOD

• Hurricane seasons have been active since 1995, causing catastrophic damage along the Atlantic coast. Delaware was hit hard by the remnants of Hurricane Floyd in 1999 and Hurricane Henri in 2003.
• In 2005, there were a record 28 tropical storms in the Atlantic region, 15 of them hurricanes. Seven were Category 3 or higher. Four of those hit the United States, according to the National Oceanic and Atmospheric Administration
• NOAA predicts another active hurricane season this year -- as many as 10 hurricanes in the north Atlantic, four to six of which could be Category 3 or higher.