The Day After Tomorrow: Maintaining Financial Security Following a Natural Disaster
~ By Gerald Rome, Colorado Securities Commissioner ~
It was a wild spring for weather, and if the experts are correct the summer will be no different. So far in 2016 we’ve already seen tornadoes, hurricanes, and severe thunderstorms that have caused flooding and wreaked havoc on people and their property alike. Those who live in places like New Orleans, Texas, and areas of the mid-west are constantly reminded what Mother Nature can do to their lives and stability. However, those of us who live in “tamer” states like Colorado also need the occasional reminder, and to know what we are not immune from the potentially irreversible damage that can happen in an instant because of a natural disaster. And it doesn’t even have to be a catastrophic event, but even something like a bad hailstorm, that can affect one’s financial security.
Those dealing with the aftermath of an unavoidable loss seem to be a prime target for financial frauds and scams. Such events cause people to dip into their savings, and then look for ways to make up losses in retirement accounts. Con artists are skillful on preying on investor’s fears in order to promote investments with promises of high return with little or no risk. Investors should always be on guard against high-pressure sales pitches for unregistered securities and non-traditional investments such as foreign currency, oil and gas investments, precious metals, gold mines, and other exotic financial products. If one does suffer some sort of substantial property loss, they will also be subject to other common frauds that we see. These common frauds include identity theft, repair/contractor fraud on damaged property, and “headline following” investment scams that promise high returns with little risk. You can learn more about each of these scams by visiting www.AskDORA.gov.
Since an ounce of prevention is better than the cure, what can you do to protect your finances. First, make sure your home is properly insured. You may want to think about creating an “emergency fund.” A store of savings can be crucial to helping you bounce back from an incident. Setting up a savings account for this exact purpose will keep you from dipping into it for other, less important needs. Experts say to plan for enough money to cover bills and general costs for three to six months if possible.
In addition make sure important documents such as birth certificates and social security cards, documents that affect your finances such as wills, powers of attorney, retirement account records, home inventory lists, and insurance records, are kept in a secure, easily accessible location. When disaster strikes, there are a million and one things that one has to manage. Financial security is one thing that, when you’ve ensured that you are properly prepared, should be a “no brainer.” And it can make all the difference in the world.