Dealing with dollar disaster
It has been a year of epic natural disasters in our country: heavy snow, wildfires, spring floods and tornadoes, and even a dust cloud that swallowed Phoenix.
Are you prepared should a sudden disaster strike?
There are steps you can take to protect yourself and minimize losses.
Review your insurance.
Know what kinds of disasters your insurance will cover.
Many people are surprised to discover they are not covered for specific types of disasters like a flood. Review your policy every year to make sure your coverage is adequate.
For example, if you've built an addition on your home and significantly increased its value, you will need to increase your insurance coverage as well.
Know your stuff.
Create an inventory of your home, its furnishing and your valuables so it's easier to create a list for your insurer in times of crisis.
Consider taking photographs as well.
Also consider keeping a folder with receipts for major purchases such as appliances, electronics and furniture.
Create an emergency fund.
Financial planning experts recommend having a three- to six-month cushion of living expenses set aside for any emergency.
You also might want to consider having some on-hand cash in case banks are affected by a large-scale disaster.
Protect your documents.
Purchase a fire safe or use a bank's safety deposit box to protect irreplaceable and important documents.
You can store all types of information here - credit card numbers, phone numbers, wills, and copies of things like your driver's license, passport and Social Security card.
You might also consider creating an electronic backup of important documents like tax returns, bank statements, insurance policies, etc.
Contact the Red Cross.
One of your first calls should be to the American Red Cross, which may already be on site to help with emergency food and shelter.
Contact your insurance company.
Depending on the type of insurance you carry, you may be covered to stay in a hotel while repairs to your home are made.
Discuss what your policy covers and what it doesn't, and be sure to get all of the nitty-gritty details on how to make a claim.
You may need to take very specific actions like saving receipts and documenting losses in a certain way.
Deduct your losses.
The IRS has an entire section of its website devoted to taxpayers who are affected by disasters.
Visit Disaster Assistance and Emergency Relief for Individuals and Businesses to learn about tax relief after a disaster and learn about disaster preparedness.