It is the same for transportation. Those who lost vehicles will have to file claims and await payment. What are these people going to do for shelter and transportation in the meantime?

That’s why access to your investments is so important. It is also one of the reasons why I have been so vocal against investments like annuities that for

The financial impact on the lives of those displaced by Katrina cannot be overstated. There are three stages of need in such situations—the immediate, the temporary and the long-term. Each stage presents different financial challenges and requires different advanced planning.

The first thing you should do to financially prepare for disaster is to have copies of your important legal documents in a safe place other than your home. This includes copies of your Will, Trusts, Powers of Attorney, and Living Will but also insurance policies, titles to vehicles, Social Security and health insurance cards and real estate deeds. As a service to my clients, I store these electronically so they can be accessed anywhere at any time. These are essential documents that may be needed in an emergency and will be invaluable should you bear a catastrophic loss.

Secondly, you should have access to cash to aid you both in evacuation and the immediate aftermath. When the power is out you can’t use a credit card. If essential supplies are in great demand they will sell to the highest bidder.

I recommend a fireproof/waterproof safe be used to protect this cash in your home. I know of people who have built such safes into the concrete foundation of their house. In emergency situations, cash is king and can make the difference between being caught in the path of the disaster or fleeing to safety.

Third, it is important that you are able to access your investments should you need to use those funds to aid your recovery. For instance, it will take months and even years for those affected by Katrina to get their lives back in order. Some people think that because they have insurance that they won’t need access to their investments in these situations, but that’s not true.

It could take weeks or months before claims are filed and settled. For events like Katrina, it is likely that insurance companies will argue over whether the damage was caused by a wind event (which is covered) or a flood event (which is not, unless you had expensive flood insurance). Some claims will end up in arbitration and/or court.

It is the same for transportation. Those who lost vehicles will have to file claims and await payment. What are these people going to do for shelter and transportation in the meantime?

That’s why access to your investments is so important. It is also one of the reasons why I have been so vocal against investments like annuities that forc

Secondly, you should have access to cash to aid you both in evacuation and the immediate aftermath. When the power is out you can’t use a credit card. If essential supplies are in great demand they will sell to the highest bidder.

I recommend a fireproof/waterproof safe be used to protect this cash in your home. I know of people who have built such safes into the concrete foundation of their house. In emergency situations, cash is king and can make the difference between being caught in the path of the disaster or fleeing to safety.

Third, it is important that you are able to access your investments should you need to use those funds to aid your recovery. For instance, it will take months and even years for those affected by Katrina to get their lives back in order. Some people think that because they have insurance that they won’t need access to their investments in these situations, but that’s not true.

It could take weeks or months before claims are filed and settled. For events like Katrina, it is likely that insurance companies will argue over whether the damage was caused by a wind event (which is covered) or a flood event (which is not, unless you had expensive flood insurance). Some claims will end up in arbitration and/or court.

It is the same for transportation. Those who lost vehicles will have to file claims and await payment. What are these people going to do for shelter and transportation in the meantime?

That’s why access to your investments is so important. It is also one of the reasons why I have been so vocal against investments like annuities that for

Third, it is important that you are able to access your investments should you need to use those funds to aid your recovery. For instance, it will take months and even years for those affected by Katrina to get their lives back in order. Some people think that because they have insurance that they won’t need access to their investments in these situations, but that’s not true.

It could take weeks or months before claims are filed and settled. For events like Katrina, it is likely that insurance companies will argue over whether the damage was caused by a wind event (which is covered) or a flood event (which is not, unless you had expensive flood insurance). Some claims will end up in arbitration and/or court.

It is the same for transportation. Those who lost vehicles will have to file claims and await payment. What are these people going to do for shelter and transportation in the meantime?

That’s why access to your investments is so important. It is also one of the reasons why I have been so vocal against investments like annuities that for

It is the same for transportation. Those who lost vehicles will have to file claims and await payment. What are these people going to do for shelter and transportation in the meantime?

That’s why access to your investments is so important. It is also one of the reasons why I have been so vocal against investments like annuities that force the investor to pay substantial surrender penalties to get THEIR money. Don’t allow yourself to be in a situation where you will lose tens of thousands of dollars in needless penalties on top of your disaster losses.

For those ravaged by Katrina, access to their investments will allow them to pay for transportation and temporary housing. It will allow them to buy food and clothing and to replace all the necessities they’ve lost. Even if some of these expenses will eventually be reimbursed by insurance, access to these funds allows them to quickly improve their situation.

For those who are retired, it is very difficult to recover financially from disaster-related losses—especially if only some of the loss was covered by insurance. Sure, you can deduct these losses on your taxes but that is little consolation. People in this situation will have little choice but to reduce their standard of living.

You may never be in a disaster that can ruin you financially, but it is only prudent that you take steps now to prepare in case the unexpected happens. Store copies of your important documents off-site, have ready access to an ample amount of cash and make sure that your investments can be sold without significant surrender penalties. These precautions will cost you little and can dramatically improve a terrible situation.