I am asked very often where I get the material for my columns, being that I have been writing for 15 years or so and for Rivertown since 2005. My answer always is life: conversations with people just like you who I am blessed to have crossed paths with that have an issue that bears attention. My style of writing, “where financial planning meets real life” is the basis of how I think and how I react to issues put before me, either good or bad. I usually find humor in all situations, being a light person, but this month, I have nothing light to say…Hurricane Sandy was a devastating natural disaster that destroyed property beyond comprehension and took the lives of those that didn’t deserve to leave this earth prematurely.
As write my columns a month in advance of our publishing date, and this case the month has given us all pause to reflect on what happened, the impact on our lives, our families and our business, and the thought of how we may have prevented some of the devastation. Elizabeth and I cannot begin to share the heaviness in our heart that we feel for our friends, clients and those we have not had the good fortune to meet. What I would like to address this month is the seriousness of this issue, and from a financial planning standpoint, what could have been done beforehand or should be done to hopefully prevent or curtail the heartbreak of being involved in a natural disaster.
I personally have a portable generator, bought 12 years ago along with 15 heavy duty extension cords purchased at the same time a month or two after a really bad storm, after the demand had diminished. I start it up twice a year, run the gas out and put it back into the garage. The box of cords is off limits for anything other than an emergency, and within an hour, I had safely run our cords to power our refrigerators, lights, and heat: we had previously had an electrician install a plug on our furnace so the generator would light the ignition on the furnace and run the circulator pumps. The cost was minimal for a licensed electrician to install this alternate source of power, and it was ready to go when we needed it. The refrigerator got plugged in for 4 hours at a time, and we shut down the generator for the night to conserve gas and have some peace and quiet.
I saw many stories of folks who had precious legal documents ruined by water. I strongly suggest that you learn from this- a scanner and software is very inexpensive, and once scanned, all your receipts can be discarded, alleviating the need to store paper at all. Be sure to back up the computer of course, and keep the back-up in another location. In addition, take and scan pictures of your house, your belongings including collectibles, jewelry, legal documents and general pictures of the house and property both inside and out in the case of an insurance claim. My insurance carrier accepted pictures of outside damage, and in 5 days I had a check in my hands to start repairs. If you have a lot of sentimental pictures, don’t use the basement to store them: find a closet high in the house and hopefully outside of unexpected flood damage.
Don’t wait for the last minute to prepare: we had 4 days advance notice that this devastation was coming. The news called it as the worst storm to hit our area in 100 years. Preparation is not hard: at leisure, it takes a relative short period of time since we usually have adequate warning. In the eye of the storm, it may be impossible. This is also a good time to with check with your property and casualty agent and do a full review of your home, auto, boat and any other property insurance to update it and make sure you are covered, and if you have a lack of coverage in any areas, including flood and water damage. I wrote a few months about “PUP” policies: Personal Umbrella Policies. These will cover you in the slim chance your primary insurance is not enough to cover your loss. It’s very inexpensive, and in the case of this 100 year flood, it may have saved you the anguish of losing your home if you had adequate coverage because the damage may have exceeded the basic policy coverage.
I cannot begin to tell you the importance of being prepared: we’ve all experienced it firsthand. Please take the time to evaluate your own personal disaster plan, and put in place a plan to save you from loss, and most important, heartache. Safety first- always.
Next month, we’ll get back to fun stuff. I wish you all a safe and loving holiday season.