03/12/2001
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Preparing for unpredictable things -- tornadoes and fires, for example -- takes a lot more gumption. Why worry about such remote risks?
But it is important. For Georgians, tornado season just started. About half of our tornadoes hit the ground during March and April.
That's not the only disaster that can mess up a family's finances. Hurricanes can do the same thing, as can fires, burglaries and self-immolating computers.
The best way to get yourself going is to break the project down into baby steps. Make the first one really easy.
Finish the first one, gloat for a minute about what a responsible person you are, then turn your attention to the next step.
Believe me, it's worth it. The alternative, if disaster strikes, is an exercise in kicking yourself for being so irresponsible. Married people also may have the delight of deciding which spouse is to blame, and how much.
After the blood-letting, you can start reconstructing tax records, replacing legal documents, and documenting claims for property that is gone with the wind.
Here's the path to peace of mind:
Step 1: Back up all important records. Too many computer users know how frustrating a hard disk crash is. If you've learned from them, you will load copies on important records onto zip drives or other storage devices.
To be extra safe, store one set of backups away from the house. That might be at work, at a family member's house or with an attorney or other trusted adviser.
You'll also need to update those files from time to time. Put it on your calendar and make yourself do it.
Was that easy enough? Pat yourself on the back and move on to:
Step 2: Inventory your stuff. If a burglar walks away with your jewelry, or a pine tree falls through your home office, you will need documentation to back up an insurance claim. Detailed inventories are also important if you want to take a deduction on your income tax.
Set aside a weekend to go from room to room, making lists of your possessions. For expensive items, such as electronics or antiques, you need to describe what it cost and when you bought it. If there are model and serial numbers, write them down, too.
Don't forget clothing and the contents of drawers and cabinets, vehicles and improvements inside and outside the house.
For a worksheet to keep you organized, go to the Insurance Information Institute's Web site, www.iii.org.
It's a good idea to back up written records with photographs or a videotape. If you're exceptionally meticulous, you can hunt down receipts for really expensive items and make photocopies.
The whole file should be stored away from your house, of course.
Step 3: Check your insurance. Homeowners should buy replacement cost coverage, at a minimum. You might also consider extended replacement cost policies, which can accommodate sudden increases in building costs.
Renters should make sure they have insurance on their belongings, since the landlord's insurance covers only his property.
Step 4: Pack up a grab-and-run bag. You'll want to tuck away a small amount of cash and travelers checks, copies of property insurance policies and a roster of important telephone numbers.
This may also be the place for a list of where you've stored other important records, backups of your computer records and even a key to your safe deposit box.
Stow these valuables in waterproof plastic bags.
Step 5: Use your safe deposit box. Experts recommend putting the originals of most records in the box. That could include deeds, marriage licenses and birth certificates, appraisals of expensive items, stock certificates and insurance policies.
The exception is wills and related documents, which should be readily accessible.
Step 6: Sweat the small stuff. If there's a fire in the apartment next door, you may be able to mitigate the damage with a readily available fire extinguisher. A fireproof strongbox may be useful for valuable papers or irreplaceable treasures like family photographs.
You should post a list of emergency telephone numbers by all phones and teach children how and when to call 911.
All this may seem like a lot of bother for an infrequent set of threats. But the alternative is a load of unnecessary pain -- and expense.
(c) 2001 The Atlanta Journal-ConstitutionThe views and opinions expressed in these articles do not necessarily reflect those of College Central Network, Inc. or its affiliates. Reference to any company, organization, product, or service does not constitute endorsement by College Central Network, Inc., its affiliates or associated companies. The information provided is not intended to replace the advice or guidance of your legal, financial, or medical professional.