A house fire can destroy your home or business and your finances, unless you take precautions. If you start early, make sure to have adequate insurance, a plan to pay your bills, and access to your important records and accounts. You can get back on your feet a lot faster and avoid issues with your credit when you need it the most. If you adopt a written financial or business plan, you will need to set aside funds to meet surprising costs. You will also want to make sure that you have a six-month supply of money in your bank account if possible. You will want to take a record of all of your personal property for insurance purposes, using pictures or video. During a house or business fire, you may have very little or no time at all to take personal items, much less think about your grabbing your financial records. Therefore, you want to make sure to collect and organize your financial information ahead of time. This can help you avoid problems and recover faster financially. In this article, we will discuss how to prepare for a house or business fire, financially.

Emergency Financial First Aid Kit

The FEMA Citizen Corps and Operation Hope created a publication called the Emergency Financial First Aid Kit or EFFAK to help you prepare your financial information, in the event of a disaster or emergency, such as a fire. You can download the publication at https://www.fema.gov/media-library-data/1441313659987-38b0760a58131b871d494ddacbf52b6e/EFFAK_2015_508.pdf. You can use the EFFAK to categorize your important financial information, documents, medical records, and domestic contracts. When you complete the kit, make sure to include pictures and videos of your home and personal possessions and keep your documents in a safe place, such as a bank deposit box. You can also visit the EFFAK resources and download useful tools, which include EFFAK checklists and other forms.

In addition to using the EFFAK, here are some other steps that can help you get started in preparing you and your family's financial information:

• You can download apps to your phone such as the FEMA mobile app in order to access information on preparation, emergency procedures, and recovery resources.

• If you are receiving any federal benefits, you will want to enroll in Go Direct at https://www.godirect.gov/gpw/ to minimize any interruptions.

Other Tips on Preparing for a Fire

When preparing for a fire, there are some other things to take into consideration besides your finances. Following are some of the other things to take into consideration when preparing for a fire.

A.     Prepare for the Unexpected

If you live in an area with a risk of wildfire, we recommend that you know how to turn off your water, gas, and electrical lines to reduce the potential of your house sustaining damage. Create a defensible space around your home. You can get tips from your local fire department geared to the area you live in. Your local fire department can also give you recommendations for the installation of smoke detectors and they may offer free home fire safety checks.

B.      Plan for Alternate Housing

When planning for a fire, you need to plan for alternate housing, in case of an emergency. If you have family or friends that live close by, try and make arrangements to go to their house for a few days in case of a fire, and vice versa. You can also research in advance to find a cheap hotel located close by, as it is hard to conduct research with no power or internet connection. Be sure to print out an escape plan or route and share it with your family and friends so that they will know where to find you. You also want to put your valuables close by or in a backpack so that you can gather them and get out in a short time period. We commonly refer to this as creating a "bug out bag"

C.      Pack an Emergency Kit or "Bug out Bag"

Inventory

Insurance

There is a vital difference between an insurance policy and an assurance policy. An assurance policy is for an event that will happen such as death, whereas an insurance policy is for an event that may or may not happen. Fire insurance covers the damage or loss to a house or property in the instance of a fire. It is a very specific form of insurance that is an addition to an existing homeowner or property insurance policy, that covers the cost of replacing or restoring a house or property, well above what a normal insurance policy covers. 

Account Information

You want to keep your account information and other important documents in a waterproof and or fireproof container, and keep a copy of all your documents in another location. If a fire destroys your home, a missing credit card may not seem to be a big problem at the time. However, if you miss a payment, your interest rate may rise, costing more money, and may damage your credit score when you need it the most. So be sure to contact your creditors ASAP and let them know your current circumstances. Many creditors will have different ways or recommendations to help you. If your home is not livable, check with your utility companies to see if you can suspend your utilities, which can add extra money to your recovery budget. Make a list, ahead of time, of your accounts and service numbers for your bank accounts, credit cards, mortgage loans, student loans, auto loans, and utility companies and put them in your waterproof container or fireproof safe. It is also a good idea to leave a copy in another location, such as a safety deposit box.

Personal Records

You can replace personal records after a fire, but it might take time. You may need some of your personal documents, such as a driver's license to prove that you are the owner of the property, in order to receive insurance benefits from fire damage. You should gather and make copies of all personal documents for every member of your family. Personal documents should include personal identification, birth certificates, social security cards, marriage certificates, divorce decrees, titles, deeds, car registrations, wills, and passports. You should also gather a list of phone numbers, web addresses, and any other contact information for your bank, insurance companies, and brokerage firms. Make copies of your credit cards, debit cards, and checks. Make sure to include the front and back sides of everything. The following list includes some other contact information that you may want to have on hand in case of a fire:

• Doctor, dentist, or other health care providers

• The person in charge of your military benefits

• The Social Security Administration

• Your lawyer

• Household service providers

• Neighborhood, civic, and church contacts

Financial Records

Financial records are some of the most common things to be destroyed in a house fire. By having access to your finances after a fire, you can start the process of recovery quicker and more efficiently. In addition, by keeping them in a safe place, you can avoid questions that may arise later on about your investments, taxes, and work benefits. You should gather and make copies of your investment records, income tax information, including pay stubs and employer benefits.

It is a good idea to build and maintain an emergency savings fund. An emergency savings fund deposited to an insured financial institution can provide immediate expenses after a fire. You want to be sure to make a plan, write it down, and make sure it is realistic and attainable.

Dealing with the Insurance Company after a Fire

Dealing with your insurance company after a fire, can be very trying, so you need to stay organized with your communications with your insurance company. Phone calls, emails, and letters can be critical pieces of evidence if you and your insurance company differ later on as to who said what to whom and when. You should keep a binder and write down notes during every phone call and with whom you spoke. Do not ever give your insurance company the original document, and if they ask for anything be sure to send them a copy of the original.

A.     Make Sure your Insurance Company Acts Promptly

The law requires insurance companies to handle insurance claims in a timely manner. Most states must send you a notice of intention within thirty days of receiving your claim. If there is not a dispute over your coverage, you are entitled to payment within that period. If you have not heard anything from your insurance company within thirty days, consider sending a copy of your claim to your state's department of insurance.

B.      Repair Estimates

Your insurance policy will allow you to repair or rebuild your house. The amount you will get back to restore your house will depend on the type of policy you have. For example, if you a cash value policy, you are entitled to the amount of money that it will take to return your house to its market value before the fire occurred. Therefore, if you had problems with your house beforehand, you may not get as much money to rebuild your house properly. If you have a replacement cost policy, you are entitled to the amount of money it would take to replace your house, up to the fixed limit of your insurance policy. The best idea is to hire an independent estimator that works for you and is paid by you. Try to find a contractor that is experienced in both building construction and how insurance companies tend to respond to similar issues. Do not accept the insurance company's estimate if you are dealing with a cash value policy, until you are satisfied that it is a fair offer.

C.      Close Your Insurance Claim When You are Ready

When dealing with your insurance company after a fire, they will want to close your claim as quickly as possible. This reduces the chances that you will find additional losses that you did not find right after the fire. Therefore, to protect against this possibility, wait a few months before closing your insurance claim after a fire. The insurance company may try to send you a check saying that you are accepting the payment in full release of your claim. You are not required to accept this check, instead, cross out that language, and initial it, then send them a letter thanking them for the check, but that you do not consider the claim to be closed.