New Disaster Planning Guide Helps Americans Prepare for Crisis

Taking measures to avoid or prepare for a disaster in advance—called “mitigation” in technical terms—reduces the likelihood of injury, loss of life and property damage far more than anything you can do after a disaster strikes.

As CPAs and their clients prepare for the possibility of a disaster, the American Institute of CPAs, the AICPA Foundation, the National Endowment for Financial Education and the American Red Cross have teamed up to create Disasters and Financial Planning: A Guide for Preparedness.

The guide provides basic steps that both CPAs and their clients can take to prepare for a disaster. These steps include the following:

1. Making a Disaster Plan. To prepare yourself to best handle a disaster, you need a disaster plan—one that the entire family understands. Some tips:

• Discuss the types of disasters that are most likely to happen where you live and what to do in each case.



• Teach children how to dial 9-1-1.



• Find out about disaster plans at work and at your children’s school or child-care center. Make sure they have your emergency contact numbers.



• Pick two places to meet if you and your family are separated in a disaster—one that’s right outside your home and another outside your neighborhood.



• Choose an out-of-town contact. Teach your children how to call that person.



• Discuss what you will do if authorities advise you to evacuate and plan what your escape routes are. Emergency shelters are opened in different places depending on the type and size of the disaster. Listen to local radio for information on locations.

2. Protecting Your Property. Think about ways you can avoid or reduce property damage if a disaster were to strike. A few ideas:

• In areas where earthquakes can cause damage, use child-resistant latches to secure cabinet doors to keep them shut. Bolt bookcases and tall furniture to wall studs. Secure overhead light fixtures to beams or rafters. Use straps to secure your water heater. Have a professional anchor the main frame of the home to its foundations.



• If you live in an area prone to wildfires, clear brush surrounding your home, make sure you have fire-resistant siding, and consider replacing wood-shingled roofs with less flammable materials.



• In an area that experiences high winds, hurricanes, or tornadoes, consider measures such as having a professional anchor your home to the foundation, strapping the roof to the main frame, installing hurricane shutters and building a tornado safe room or shelter in your home.



• To protect against flooding, move electrical panel boxes and the furnace from the basement or crawl space to an upper floor or attic. You might also elevate the home or relocate it.



• Know how to shut off your utilities (gas lines, water, electricity).

3. Protecting Your Income. When preparing for the possibility of a disaster, you need to consider how it may affect your job. Get answers to these questions:

• Does my company have a disaster plan? If so, what is it?



• If I’m unable to get to work after a disaster, will I continue to be paid? If so, for how long?



• If the business must shut down temporarily, will I continue to be paid? If so, for how long?



• Would I be able to use or substitute sick leave pay, vacation pay or any employer-paid emergency assistance?



• Would I be eligible to collect unemployment compensation? If so, when?



• If I’m injured in a disaster, what medical and disability benefits does the company provide and for how long?



• If I’m injured on the job during a disaster, would I be covered by workers’ compensation?

4. Protecting Your Health & Life. If you or a family member is injured in a disaster, coverage such as medical insurance, disability policies and long-term care could quickly become your most important assets. You should do your best to:

• Find out what the plan will cover and what your out-of-pocket costs might be if you are seriously injured in a disaster.



• Learn what procedures the insurance company requires you to follow in an emergency.



• Do your best to make sure you never go without health insurance for more than 62 days (two full months). Otherwise, you may have to wait a full year for coverage for pre-existing medical conditions.



• If you change jobs, look for a company offering a group health insurance plan. A health insurance benefit can be worth thousands of dollars.

5. Protecting Your Records. Two ways to protect your records and other irreplaceable items from disaster is to store them in a bank safe deposit box or in a home safe. Remember:

• Put important papers in a box you can grab in the event of an emergency. Some items to include: traveler’s checks, a few rolls of quarters, negatives of important personal photographs, a list of emergency contacts, copies of prescriptions and medical records, copies of insurance policies, backup disks of critical computerized information and copies of other important family and financial records.



• Store original documents, such as property deeds and birth certificates, in a bank safe deposit box.

6. Protecting Your Loved Ones. Imagine that you could take only one suitcase or pack a single carload in the event of a disaster. What would you take, how would you leave your home, where would you rejoin your family and who would you call if you became separated? Before you pack all your possessions, take these factors into consideration:

• The most crucial document is a will. It names your heirs—the people you want to receive your money and other possessions when you die—and appoints a guardian if you have young children.



• Durable power of attorney. This document names the person (or other entity) you want to pay your bills and manage your money if you become ill or incapacitated and are unable to make these types of decisions.



• Healthcare proxy names a person who will make decisions about your health care if you get sick and cannot make those decisions yourself.

To order copies of Disasters and Financial Planning visit www.cpa2biz.com/store, call 1-888-777-7077, or fax 1-800-362-5066 and refer to product no. 017232. The guide is also available online on the American Red Cross Web site at www.redcross.org/financial planning. Additional resources on this topic are available in the Life Crisis section of the AICPA’s financial literacy Web site, www.360financialliteracy.org.