Five Tips to Prepare Financially for the 2020 California Fire Season
California’s wildfire season ramps up during the summer and fall months as weather conditions become drier, increasing the odds of more wildfires igniting and destroying homes.During the summer months, the immense heat fuels the velocity of the fires, while in the fall winds can increase the intensity of wildfires, the intense winds and excessive dry fuel coupled with dated electrical infrastructure have proven to be deadly combination.
The recent wildfires have devastated many in California, who lost their homes and belongings. Although we just made it through the 2019 fire season, let it be a warning to all of us for the the 2020 wildfire season.The conditions that have created the fires in recent years are not going away, perhaps the risks are even greater. Recently Pacific Gas and Electric CEO publicly stated that it could take up to 10 years to update critical infrastructure.
If you live in California, assuming your family, property, and loved ones will at some point be impacted by late summer and fall wildfires is a safe bet. Preparing now is essential to weathering a future firestorm. A critical component to firestorm preparation is being prepared financially.Being financially and mentally prepared before the wildfire season begins allows you to reduce the burden and potentially disastrous impact.
Here are five tips for being proactive ahead of the 2020 wildfire season.1. Maintain an emergency fund.
Create a fund for emergencies so that you can replace food and other perishables, temporary housing and additional transportation costs.If power in your area is shut off, everything in your fridge will likely spoil, so having a fund to restock perishables when the power is turned back on is important. The electric utility is not likely to reimburse you for shutting off your power, and no degree of outrage on Facebook is going to change that. Some households have chosen to acquire a small portable generator to provide electricity to refrigeration units, and other critical items. Waiting until the power is turned-off is not a good option, as it will be difficult to find one to purchase.
While the Red Cross has done an excellent job of providing emergency shelter, the conditions provided are not always ideal. Having extra cash on hand to help pay for housing can be really helpful. In addition, an extended stay away from home can force you to eat out for three meals a day and run the bills fast.When working with clients I generally recommend three to six months of monthly living expenses should be set aside for emergencies. Establishing and maintaining an emergency fund can be a lifeline for staying on budget.
Some savvy savers even set-aside an entire disaster emergency fund to ensure there is money in place in a time of disaster.
2. Purchase a fireproof and waterproof box.Store all your critical documents such as passports, insurance policies, wills, Social Security cards, birth certificates and custody agreements and any small valuables such as jewelry in a fireproof and waterproof box. Most safes will not last if your home burns down, so plan on having copies and back-ups of these items. Here is a link to the safe I bought for my papers. This is not an endorsement, but from what I could tell this looked like one of the best and most affordable on the market.
Consider using a secure cloud-based storage solution – upload your financial documents ahead of time by scanning or taking photos of your policies and legal documents. Many clients worry about security online, justifiably so, the truth is your whole life is already online, you just don’t have access to it. If you do use a cloud based service, ensure it has 256 encryption. Here is a good article discussing online encryption.The key is to have a back-up to everything, and know where you keep these documents so in a time of emergency you can grab and go.
3. Update your estate plan.Revisiting your estate documents annually is always a good idea, especially if you’ve recently married, divorced or had a child. Ensure that a guardian has been named for your child or other family members.
Review your will, trust, living will and advance directive so that your wishes are fulfilled in case of a death or severe illness. These legal documents will help avoid any potential legal issues and complexities in the case of loss.In writing this article I connected with Petaluma based estate planning attorney Andrea Pierotti. I asked her if she had any advice for helping California residents prepare for fire season, she shared a few thoughts of wisdom.
"In the world of Wills, Trusts, and Powers of Attorney, the original, signed documents are still irreplaceable. The original documents should be kept in a fire-proof safe, or better yet, bank safety deposit box, to protect those documents. Also make sure to keep copies of your documents handy in the event you need to evacuate, or check that you or your attorney have an electronic version of your documents."
"People often think a Power of Attorney is only effective if they have dementia or some other incapacity, but during fire season, a Power of Attorney is an essential tool if you need to evacuate and name someone to make immediate financial decisions, move money between your accounts, and pay your bills in the event you do not have access to those accounts. Make sure your Power of Attorney is up to date and names agents you trust."
4. Check your insurance coverage.Review your insurance coverage for your home, cars and any other property you own. Discuss whether you have adequate coverage or need to increase your coverage with your insurance agent.
It's important to document everything in your home in the case of loss. An easy way to do this is to utilize your video on your phone and walk around the home filming your assets. This could help in the case of a fire and total loss.
Talk to a knowledgeable local resource such as a financial planner about your current coverage amounts and other investments you might need to make to protect your home such as replacing plants or organic mulch, separating wood fences with a masonry or metal barrier and installing new fire-resistant window treatments and fire extinguishers in your home.Shane Eastman of Eastman Insurance in Vacaville California has put together many helpful videos for understanding your insurance and coverage.
5. Pack food and necessities.
Have a go bag packed for each of your family members. Pack clothing for at least a few days along with prescription medications and food and water, including items for your pets. A good rule of thumb is to have three days worth of non-perishable food and a gallon of water per day for each person.
Pack a flashlight, portable and battery-powered radio, hiking boots, a map with more than one evacuation route in case cell phone towers are down, whistle, extra portable cell phone chargers and other necessities in case you have to evacuate overnight. Keep a list of emergency contact numbers handy. Designate a meeting place ahead of time.
Lastly, have a list of items that you will need to take with you in the event of an emergency. Having a prepared list will save you valuable time gathering essential items. Have a plan and execute the plan.
Sonoma Wealth Advisors is a registered investment adviser and only transacts business in states where it is properly registered, or is excluded or exempted from registration requirements. The information presented is for educational purposes and believed to be factual, but we do not guarantee its accuracy and it should not be regarded as a complete analysis. All expressions of opinion reflect the judgment of the author/presenter as of the date of publication and are subject to change and do not constitute personalized investment advice. An investment adviser representative should be consulted directly before implementing any investment strategy. Investments are subject to market risks and the potential loss of the entire principal amount invested. Past performance is no guarantee of future results.