Financial Emergency Preparedness

1. Financial Emergency Preparedness Developed by Dr. Joyce Cavanagh, Associate Professor and Extension Family Economics Specialist, Texas A&M AgriLife Extension Service, Revised May 2013. Educational programs of the Texas A&M AgriLife Extension Service are open to all people without regard to race, color, sex, disability, religion, age, or national origin. The Texas A&M University System, U.S. Department of Agriculture, and the County Commissioners Courts of Texas Cooperating

2. Topics for Discussion • Pre-Disaster • Emergency Financial Records Kit • Storing for Transporting • Insurance Review • Post-Disaster • First Steps • Insurance Claims

3. Emergency Financial Records Kit • BE PREPARED for QUICK Evacuation – Grab and Go! • Identification for ALL family members • Birth certificates • Social Security cards • Insurance cards • Drivers’ licenses • Passports

4. Emergency Financial Records Kit • Checkbook • with enough checks and deposit slips for 1 month • ATM cards, credit cards, debit cards • Photo copy front and back of all cards • CASH • Amount needed depends on number of family members, ability to access cash

5. Emergency Financial Records Kit • Financial account information • Account numbers, addresses, and phone numbers • Copies of insurance declarations pages • Copies of past tax returns (3 years) • Deeds and titles to property and vehicles • Copy of recent pay stub • Safe deposit box key • Inventory of contents

6. Emergency Financial Records Kit • Personal Property Inventory • Digital photos, video • Copies of receipts for large items • Software programs • Insurance Information Institute www.knowyourstuff.org • Copy of Will or Trust • Medical records • Immunization records • Health history • List of prescriptions and dosages

7. Record Storage and Transporting • Emergency supply kit – accessible but SECURE • Paper files and copies • Digitize! • Scan documents • Scan old photos • Store on: • CD/DVD • External hard drive • Flash drive • Online storage

8. Record Storage and Transporting • Fireproof home safe • Safe deposit box • Store documents and items in sealed plastic storage bags • Multiple spots • Emergency supply kit • Safe deposit box • Relative or friend • Office • ‘In the Cloud’

9. Other Important Tasks • Review insurance coverage • Sign up for direct deposit • Arrange automatic bill payments • Online banking

10. Insurance • Review coverage annually • Automobile • Comprehensive covers hail, wind, and water • Disability • Life • Face value, beneficiaries • Homeowner’s • Flood • Windstorm

11. Homeowner’s Insurance • Basic types of policies • All risk – broad protection covering all perils unless specifically excluded in policy • Named perils – narrower protection and covers only those perils stated in the policy • Methods of replacing property • Replacement cost – pays all necessary expenses to replace or repair property up to policy limits minus any deductible • Actual cash value – cost to replace or repair property minus depreciation minus any deductible

12. Homeowner’s Insurance • Types of coverage • Dwelling – house and any outbuildings • Personal property – household items • Liability – injury to others or damage to their property (basic coverage $25,000) • Medical payments – medical bills of those hurt on your property (basic coverage $500) • Loss of use – additional living expenses while home is repaired (most common 20% of dwelling limits)

13. Homeowner’s Insurance • Approved policy forms in Texas • HO-A – limited cash value coverage on home and its contents for named perils only; standardized policy • HO-A Amended – more extensive coverage than HO-A but less than HO-B; additional coverage specified through endorsements; coverage differs by company • HO-B – replacement cost coverage on dwelling for most perils except those excluded in policy; standardized policy

14. Homeowner’s Insurance • HO-C – extensive coverage on dwelling for most perils, most expensive; standardized policy • Other Approved Policies – varying levels of coverage; policies must be approved by Texas Department of Insurance (TDI); not standardized • Renters – cash value coverage for belongings, liability protection, and extra living expenses • Condominium – benefits of renters plus damage to improvements, additions and alterations to the condo unit

15. Homeowner’s Insurance • Mobile homes – eligible for homeowner’s policy if without wheels and resting on blocks or a permanent foundation • Most insured by a mobilowner’s policy • Auto policy that covers mobile homes used as residences • Extremely limited coverage

16. Homeowner’s Insurance • Most policies cover losses caused by • Fire and lightning • Vandalism and malicious mischief • Explosion • Smoke • Sudden and accidental water damage • Aircraft & vehicles • Theft • Riot and civil commotion • Windstorm, hurricane, and hail

17. Homeowner’s Insurance • Most policies DO NOT cover losses by: • FLOODING • Earthquakes • Termites, insects, rats or mice • Freezing pipes when house vacant • Wind or hail damage to trees and shrubs • Water damage from continuous and repeated seepage • Wear and tear or maintenance • Losses if house vacant for 60 days or more

18. Homeowner’s Insurance • Key points to look for: • Policy limits • Declarations Page – outlines coverage and limits • Cash value vs replacement cost • Dwelling • Personal property • Deductibles – likely 2% • Hurricane, windstorm, and hail • Other perils • Endorsements • Additional coverage – jewelry, electronics, replacement cost, liability

19. Homeowner’s Insurance • Homeowner Action Steps • Review homeowner’s policy • Follow-up with insurance agent • www.helpinsure.com

20. Flood Insurance • Flooding is most common natural disaster • ~60% of homes in South in high-risk areas have flood insurance; only 1% outside of high-risk areas • Coverage provided through FEMA’s National Flood Insurance Program • Policies subsidized through government; sold and serviced by regular insurance agents

21. Flood Insurance • Maximum coverage • $250,000 on structure • $100,000 on contents • Sold separately • NO additional living expense coverage • NO replacement cost coverage • Not effective for 30 days from purchase • High deductibles are common (2%) • www.floodsmart.gov

22. Windstorm Insurance • Wind and hail coverage excluded from some homeowner’s policies in 14 coastal counties and part of Harris County on Galveston Bay • Texas Windstorm Insurance Association (TWIA) – provides wind and hail coverage to these residents – www.twia.org • New construction, additions, and renovations of property require windstorm inspections during the construction process

23. Post Disaster • First Steps • Take stock – and pictures!! • Document damage BEFORE taking any action to prevent additional loss/damage. • Call insurance agent or company to report damage. Follow-up with a WRITTEN claim. • Do not make permanent repairs until an adjuster has inspected damage. • Maintain a Repair Log with a record of repairs, expenses, and ALL receipts. Remember that temporary repairs are covered by your final settlement. • Keep a log of additional living expenses and receipts.

24. Post Disaster • Maintain a communications log of all conversations related to your loss. • Date, time, company, person you spoke with, telephone number and extension, summary of the conversation (What did they say? What did they agree to? What did you say? What did you agree to? If no answer – summarize your message). This communications log is the only way you will remember things and keep them straight. • Keep a calendar. Note when you need to follow-up with calls, visits, filing deadlines, etc. Mark scheduled appointments.

25. Post Disaster • NEVER give away original documents – always send a copy. • Take more photos! Take photos of every step in cleanup and repair. Download regularly to a CD or flash drive. • Make a list of everything you throw away – and take pictures!!

26. TAKE ACTION!! • It’s never too early to take action to become better prepared for a disaster! • Start today to • Develop a financial Grab and Go Box • Compile a personal property inventory • Review and update insurance coverage

27. Additional Resources • Texas AgriLife Extension Service • http://texashelp.tamu.edu • http://fcs.tamu.edu • Texas Department of Insurance • www.helpinsure.com • National Flood Insurance Program • www.floodsmart.gov • Insurance Information Institute • www.knowyourstuff.org