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FDIC Consumer News - Summer 2016

Preparing Your Finances for a Flood, Fire or Other Disaster: Having a Plan

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FDIC: FDIC Consumer News Summer 2016 - Preparing Your Finances for a Flood, Fire or Other Disaster: Having a Plan

Photo: Federal Emergency Management Agency

Without warning, a flood, fire or other disaster could leave you with a severely damaged home, destroyed belongings and barriers to managing your finances.

Many people think of disaster preparedness as having a stockpile of water, canned food, and flashlights, but people also need access to cash and financial services.  That’s why it is important to include financial preparedness in your disaster plans.  Here is our latest summary of important preparations.

Periodically review your insurance coverage. You should have enough insurance to cover the cost to replace or repair your home, car and other valuable property, as well as temporary housing if you are displaced from your home.  Those who do not own a home should have renters insurance. Also, make sure that you have the right kind of coverage for the types of disasters likely to occur in your area.  For example, homeowner’s insurance does not typically cover events such as flooding or earthquakes, so you may want to consider whether you need additional coverage.

Build and maintain an emergency savings fund.  While your personal hazard insurance should cover most or all of the damage to your home and property, an emergency savings fund deposited in an insured financial institution can provide for immediate expenses and help fill the gaps.

Sign up for direct deposit of your paycheck or government benefits.  “In a disaster, taking care of simple things like depositing a check can be overwhelming,” said Surge Sen, chief of the Supervisory Policy Section in the FDIC’s Division of Depositor and Consumer Protection. “Direct deposit will help you avoid missing out on important income during a disaster.”

Consider arranging for online and/or mobile banking. Your bank branch may be temporarily inaccessible after a disaster. Most bank accounts enable you to pay bills online and deposit checks and conduct other transactions using your smartphone or other mobile device. (See How Do You Deposit a Check with Your Smartphone or Tablet?)

Gather and organize important documentation. Here are suggestions for what to collect, followed by where to keep these items:

Think about what to keep where. The following are options to consider.

For more information, including how to assemble a preparedness kit to grab and go if you had only a few moments to evacuate your home, read tips from the Federal Emergency Management Agency