AFTER A CATASTROPHIC EVENT OR DISASTER
First, remember to Plan, Prepare and Stay Informed. That is the start of any successful recovery.
When a disaster strikes it can damages your home or destroy it and your neighborhood. Your life will change. The change may be temporary or permanent. Whether it’s a flood, fire, hurricane, tornado, earthquake, or winter storm or freeze, suddenly many of the necessities of daily life you depend on will not work or are not available – basics such as food, water, warmth, clean air may be impaired. Electricity, and thus refrigeration, gas (heating & cooking), city water may be interrupted. The ability to drive (due to injury or road damage) may be impaired. You may need to evacuate quickly to obtain food, water, and shelter, and to avoid imminent danger. Your recovery should start as soon a possible, but first you need to secure your family and pets. Mitigate, if possible, further property loss to minimize financial losses.
Be prepared, many of the tips below assume that you have made adequate provision and planned ahead of time. An appropriate emergency kit with basics for safety and security is a necessity, of course, but also tools for recovery including a digital camera and a journal and pen.
Practice the steps below to determine what your needs will be so that you can make proper preparations for your family to have a successful response and accelerate your recovery. THERE WILL BE CHAOS, ASSUME THAT YOU ARE ON YOUR OWN.
Read these tips frequently, be familiar with the steps. The first time you make pancakes you need to read each instruction, After a few times you know what to do. You want to have the same ease with the steps in this material.
Immediately After the Event
The security and safety of people and pets is your primary concern, you want to be safely out of harm’s way, you should do the following:
· Do you have a plan in the event the family is not all together. Where will you meet? Will that change depending upon the day of the week or the time of day?
· Make sure everyone is OK. If anyone is injured, weak, extremely distressed, or has any other unusual symptoms, seek medical help right away.
· What do you have in your emergency first aid kit that will be needed if medical help is not available?
· If your home has been severely damaged, turn off your gas and electricity if you can safely do so. Your power lines and gas lines may be damage. Let utility crews turn them back on when they determine it’s safe.
· Check up on your neighbors
- Check on disabled persons, children who may be alone when the disaster strikes and elderly people who may stay inside from fear or disability.
- Check their electrical and gas utilities, fires or explosions at neighbors’ property could increase your loss.
· Don’t be in any hurry to go back into your home. There are many risks, from floors or ceilings giving way, live wires and gas leaks. Don’t go in if the gas and electricity haven’t been turned off, don’t turn on electrical switches or appliances in case they may cause a spark that ignites a gas leak. Don’t try to turn the utilities back on yourself once you have turned them off.
· Report any downed power lines or broken gas lines right away, if at all possible. What is the number you should call to report the downed lines ___________ or broken gas lines ___________?
· Stay off the roads unless you are evacuating so emergency workers can move quickly. Stay out of their way as they work.
· Keep listening to the radio or TV for news for instructions about where to go, what places are dangerous (fallen trees, unsafe bridges, flooded streets), and how to contact the local disaster relief services. Relief services can help with such immediate needs as shelter, food, medicine, eyeglasses, and clothing. Do you have an emergency radio that is not dependent on electricity or batteries? Do you have an emergency supply of medicines?
· If there is a fire hydrant near your home, clear away any debris so the fire department has access to it.
· Notify your employer if you can’t get to work because of the disaster or need to attend to the needs of your family. Where is the nearest pay phone?
· If there is any damage to your property, contact your insurance agent or company. You should have a list of emergency phone numbers including your insurance and other important contacts. (The list should be in a place that all family members have access to in case you cannot personally get to it.)
· Water. A normally active person needs at least two quarts of water each day, and up to twice that much in hot weather. (That is just for drinking.) Children, nursing mothers, and ill people need even more.
- Disconnect the water line to the hot water heater to keep contaminated water from spoiling the water in the tank. If the water supply is disrupted, you can use water from your hot water tank, pipes, ice cube trays, or the reservoir tank of your toilet (but not the bowl). You can also collect rainwater and water from swimming pools, streams, rivers, ponds, lakes, and natural springs. But be sure you boil any water you drink or use for cooking.
- Don’t drink floodwater, it is likely contaminated. Water in water beds have pesticides and other chemicals. Contact with any water that is dark, has an odor, or has any material floating in it must be avoided.
· Food. You’ll need to keep your strength up, so eat at least one well-balanced meal each day. (Is your emergency food supply adequate? Have you rotated items that will expire in the next six months?)
- If your stove isn’t working, you can use a fireplace once you are sure that all gas has been flushed out o of the home (if the chimney isn’t damaged), candle warmers, chafing dishes, or fondue pots. Charcoal grills and camp stoves should only be used outdoors, and any fire should be outdoors. Even in an open carport, a fire can send sparks into the roof and start a house fire.
- Canned food doesn’t need to be heated, but if you want to heat food in the can, be sure to open the can and take off the paper label first.
- If you are without power and refrigeration, first use up perishable food from the refrigerator, then from the freezer. Open the refrigerator or freezer door only when absolutely necessary, as that lets in heat.
· Shelter. The American Red Cross and other volunteer agencies may set up shelters for people whose homes are too dangerous to stay in. Their facilities may be overburdened. The Federal Emergency Management Agency (FEMA) can provide housing assistance if your home was damaged or destroyed. Call 800-462-9029 (TTY/TDD: 800-462- 7585).
· Locating and contacting family members. The American Red Cross maintains a database to help people find family members after a disaster. Your family members in other cities can call their local chapters, but should not call the chapter in the disaster area.
· Electrical lines. Don’t turn the electricity back on after a flood if the system was flooded or if you smell gas. Don’t handle electrical equipment in wet areas. Avoid puddles and other standing water -- you could get a shock from underground or downed power lines. Assume all wires on the ground are dangerous, including cable TV lines. If you have a generator, be sure to use the proper size and type of power cord; never run cords under rugs or carpets, and never connect the generator to another power source.
· Natural gas, propane, gasoline, and other flammables. Don’t turn the gas back on after a flood. Let the utility crews handle it. Use a flashlight, never matches or candles. Beware of leaking gas lines and propane containers, gasoline that has leaked from vehicles, and lighter fluid or paint thinner that has spilled.
· Carbon monoxide. Using fuel-burning devices (such as kerosene lamps, wood stoves, fireplaces, gas-powered pumps, and generators) for indoor cooking, heat, or light can be very dangerous. The carbon monoxide these devices give off is invisible and odorless, but can be deadly. Provide plenty of ventilation and watch for symptoms of carbon monoxide poisoning: mild headaches that persist or get worse, shortness of breath, irritability, poor judgment, memory loss, or rapid fatigue. Never try to heat your house with a gas stove. Never burn charcoal in the house or garage.
· Floodwater. Stay out of floodwater, as it can be surprisingly powerful. Water only six inches deep can sweep you off your feet. Floodwater is highly contaminated. Don’t eat or drink anything the floodwater has touched -- throw it out.
· Unsafe buildings, roads, bridges, and sidewalks. Stay on the ground, as structures that are still standing may fall in on you or collapse under you. Floods can erode roads and sidewalks.
· Exposure. Watch for symptoms of frostbite -- numbness and loss of color in the toes, fingers, nose, or ear lobes -- and hypothermia, when body temperature drops dangerously low. Get medical help immediately. Warm the person gently and wrap him in blankets, but don’t rub the hands, arms, or legs, and don’t try to warm the person up with coffee, tea, or alcohol. These can actually do more harm than good.
· Animals. Disease-carrying animals and poisonous snakes may also find themselves homeless. Avoid putting your hands or feet under debris where an animal may be hiding and wear boots and long, heavy pants when clearing out debris.
· THE RETURN OF THE DISASTER! Listen to radio or TV reports to be alerted if a storm, hurricane, or flood is likely to strike again.
· Fraud and crime. Disasters can bring out looters and con artists. Be careful, keep an eye out for elderly neighbors who may be easily conned. Be wary of people who offer to help if you don’t know them and they aren’t part of an identifiable organization, especially if they offer to come into your home. If your house is looted, notify the police immediately. You may need that police report to file an insurance claim.
· Keep an eye on children at all times. Aside from all the dangers listed above, dangerous items in your house, such as cleansers, medications, or sharp knives, may have been knocked out of their usual places and could get into children’s hands.
Where to get help
· Local, national, and government organizations offer help during emergencies and disasters:
- The American Red Cross -- contact your local chapter
- The Federal Emergency Management Agency (FEMA) FEMA’s helpline number is 800-525-0321
- The Small Business Administration (SBA) -- check for the number in your local directory
- The Salvation Army -- check for the number in your local directory
· Disaster Recovery Centers may be established nearby the the area affected by the disaster. You can meet with representatives of federal, state, local, and volunteer agencies.
· Local churches, service organizations (such as the Kiwanis Club, Lions, or Knights of Columbus), large local employers, and local newspapers and banks may offer help.
Recovering important records and documents
· Move quickly to replace important documents that were lost or destroyed -- your driver’s license, auto registration, check books, insurance policies, health insurance cards, credit cards, titles to deeds, stocks and bonds, wills, and other important documents.
· Make copies and store them away from your home. Scan the materials and save them on thumb drives. Send a copy of a thumb drive to a trusted relative or friend who lives at least two hundred miles from you.
· Do what you can to reconstruct lost financial records. Banks, credit card companies, and utilities will be able to provide some back statements. The IRS provides federal tax returns, tax preparation firms usually maintain copies of clients’ recent returns. Information on the hard drive of a damaged computer may still be recoverable. Make backups frequently.
· Document the loss.
- A digital camera can record hundreds of picture.
- A journal should be started to record all conversations related to the loss and recovery process.
· Save receipts for all your expenses. These will help both in filing an insurance claim and in claiming losses when you file your income tax return.
· Make lists, as soon as possible, of all property that was damaged or destroyed. These will prove useful for your own purposes, and essential for filing insurance claims or seeking financial assistance.
Prepare your inventory before the event. Include all of your home’s contents. You can check what is damaged or lost in the fire or hurricane or the collapsed home. This list is one of your preparation steps that is actually part of your recovery plan.
Include the following information for each item:
- Brand name, description, model, year, ID number
- The place and the date or year you bought it, and the price
- Any documentation such as a sales slip, canceled check, warranty, or correspondence with the manufacturer or retailer
- Description of the damage and what caused it. For example, a sofa may have been soaked by a flood, or by water sprayed over it by firemen putting out a fire, or by water pipes that burst due to a fire.
- Any photographs that show the item before and after it was damaged
Do your best to recall everything that’s missing. Go over photos you have taken inside your home, and ask friends and family if they have any. Draw floor plans of each room to help you remember what items were there. You can also jog your memory by walking down the aisles of department stores, looking through shopping catalogues, and scanning the classified ads in the newspaper.
· Let utility companies know if they should stop billing to your home because it has been destroyed or you can’t live in it.
· Get in touch with creditors right away. Most will be willing to help you get through this situation, especially if many people have been affected.
If you are insured
Your homeowner’s policy will probably cover much of your loss, but keep in mind that policies vary. Your policy may cover these and other expenses: damage to your home, including rental units; loss of personal possessions; your living expenses if your house is unlivable due to damage; and rental payments that you cannot collect due to damage.
Here are the steps you will need to take in filing a claim:
· Contact your insurance company right away. If possible, have your policy numbers ready when you call. Find out how they want to process your claim. They may have special procedures set up if many people were affected by one disaster. Follow up your call with a letter, and keep a copy.
· If your home is uninhabitable, find out if your insurance company will pay for living expenses. If so, ask if this will reduce the amount you ultimately receive for damages.
· Begin salvaging. Don’t wait for the agent or claims adjuster, but do take photos. Keep damaged materials as proof of loss.
· File your claim. Do it as quickly as possible, as claims are generally handled in the order received. File a claim even if you are not specifically covered for this type of disaster, as you may be covered for secondary effects, such as the fire and water damage that often result from an earthquake.
· Make it easy for the insurance company personnel to find you and your property. Leave phone numbers where claims adjusters can reach you.
· Work with claims adjusters. Provide them with your list of damages, and note if the list isn’t complete. Take notes on all conversations with the adjuster, and write
follow-up letters to the company to confirm what was said. Find out what your neighbors’ adjusters are saying, but keep in mind that your policies may differ.
follow-up letters to the company to confirm what was said. Find out what your neighbors’ adjusters are saying, but keep in mind that your policies may differ.
Remember that insurance companies makes money by limiting payments on claims. Don’t just take an offer from an adjuster, it will probably be low to start.
· Consider bringing in an independent adjusters if you are not satisfied with your insurance company’s damage estimates. These measures may delay settlement and cost you extra money, but they may be worth it.
· Settle the claim, but don’t be in too big a hurry to do so, and don’t accept settlement checks as final. You may need to file additional claims later, for example, if your house is looted. Additional damage may appear later, you may assume that the foundation is not damaged, and later find out that it has lost its structural integrity.
If you are not insured
Loans and grants may be available from FEMA and the Small Business Administration (SBA). FEMA and SBA are the main organizations that help uninsured and underinsured homeowners and renters when a federal disaster has been declared. FEMA makes grants and SBA offers loans. Relief aid is also available from your local city or county government, private lenders, American Red Cross disaster relief, and other volunteer organizations. Watch TV or read the newspaper for announcements of available aid, such as the following:
· Red Cross assistance for immediate repairs and living expenses when no other immediate assistance is available.
· Small Business Administration loans for rehabilitation of homes and small businesses. Interest rates are moderate.
· Commercial and Federal land bank loans with moderately low interest rates, for repairs and improvements.
Unemployment, tax relief, and legal assistance
· Unemployment benefits. If you lose your job due to a disaster and are not eligible for regular Unemployment Insurance compensation, you can apply for Disaster Unemployment Assistance. Call 800-462-9029 (TTY/TDD: 800-462-7585) or your local unemployment office.
· Legal aid. Low-income people can receive free legal counseling from local members of the American Bar Association Young Lawyers Division. Call 312- 988-5522.
· Tax relief. You may be eligible for significant tax deductions or refunds. The rules are complicated, so it’s a good idea to work with a tax adviser or other qualified professional. But, see “Don’t Rush to Deduct.”
· Contact a knowledgeable income tax professional. You will need assistance with proper reporting of the loss on a tax return. There will be many opportunities for tax savings. Some will have very specific time deadlines, specific documentation will be needed.
But, DON’T RUSH TO DEDUCT. A tax deduction today may have to be reported later as income after an insurance settlement, that “free” loan from the government may come with a high price if you got the benefit at a low tax rate and have to repay it at a higher rate.
Repairing and rebuilding your home
· If you have to leave your home, let the local police know it will be unoccupied. You may want to secure your home to avoid vandalism or looting by boarding up the windows.
· Let others know where you will be if you have to leave your home. Let your family and friends, insurance company, mortgage company, employer, post office, delivery services, fire and police departments, utility companies, and your children’s schools know where you will be.
· If it’s safe to go back in your home, try to collect necessities and important papers -- insurance information, medication, eyeglasses, hearing aids, and valuables such as credit cards, bank books, cash, and jewelry. You may want to save important documents from your computer onto diskettes (if the power is on and it won’t take too long).
· Salvage what you can. Professional fire and water damage restoration businesses can help, but check with your insurance company to see who’ll be paying for these services. Don’t throw away damaged goods until you’ve made a complete inventory. If you need to get rid of something that’s dangerous or in the way, make a record of it.
· Make necessary immediate repairs. To prevent further damage, you may need to patch the roof, board up windows, or tear down a damaged chimney. The Red Cross and other volunteer organizations may be able to help you obtain materials or provide volunteers to help with the work.
· Find a reputable contractor.
- Get several estimates, compare notes with neighbors
- Check the credentials of any contractors you are considering, is the contractor’s license valid and in good standing, are there any complaints filed against the contractor?
- Get contracts in writing and make sure repairs will be done according to local building codes. Make sure that there is a clear statement of work to be completed.
- Don’t pay more than $1,000 to any contractor up fromt.
· Rebuild. Pay only for performance, periodically as the work progresses. Don’t make your final payment until the job is done and you are satisfied with it. Don’t sign over an insurance settlement check to a contractor.
The importance of maintaining routines
Your will be angry and confused, that is normal. You will experience great amounts of stress, it is likely that you will be in psychological shock. You will be forced to make major financial decisions about assets in which your emotional investment equals or exceeds your financial investment. Don’t rush, even though you think that you must hurry up with decisions.
When so much of your everyday life has been disrupted, it is especially helpful to maintain as much of a normal routine as possible. This is worth some extra effort,
because maintaining order and routines helps you deal more effectively with all the work of recovering from a disaster.
· Make sure your child gets to school (if it’s open) and keeps up with homework.
· Have meals together as a family.
· Find time to be spend with family and friends that is not focused on the event or the recovery. Watch a TV show together, listen to a favorite radio program, do the daily crossword puzzle, or get together with friends.
· List important jobs and chores, get them done, and then check them off your list.
As you return to familiar routines, you’ll start to feel that life is returning to normal once again.
FAMILY DRILL AND PRACTICE
Here is a checklist to use to drill your family:
POST-EVENT RESPONSE AND RECOVERY CHECKLIST
Substantiation of Loss
Call emergency services as needed. However, lines will be overloaded and wait times may be excessive for assistance needed.
ASSUME YOU ARE ON YOUR OWN FOR AT LEAST THREE DAYS.
Important steps to take immediately. This list provides a head start before you discuss your situation with a tax professional.
First, Check on the health and safety of any persons or pets,
Second, Secure the impacted area;
If you are not home or at your office, attempt to contact family and business associates to verify their physical health and safety
Locate and test emergency camera.
Take measures to protect the physical security of any intact assets, If safe to do so:
Turn off Gas – IF SAFE TO TURN OFF
Turn off Water – IF SAFE TO TURN OFF
Turn off electricity – IF SAFE TO TURN OFF
Photograph as much damaged and undamaged areas as is safe to do.
Take notes and journal all conversations.
Use tarps to cover exposed areas
Remove valuable assets from vulnerable areas, if safe to do so.
Then: Mitigation - Stop or reduce continuing damage.
Call family and friends in immediate area to check on their well-being and communicate your own status. Lines may be overloaded or down.
Call out-of-area friends and family to report status and set up line of communication. You may have to wait for them to contact you.
Locate emergency supplies. Evaluate the condition and quantities of thee items. Remove them to a safe place if necessary.
Retrieve important documents
Contact out-of-area people entrusted with documentation back-ups. Verify condition and date of back-ups.
Start and maintain a record of all your financial transactions.
Because of insurance claim and tax benefits that may turn out to be available, you should keep records of all extra costs that you incur as a result of the disaster to keep your family safe and secure or your business back to an operational state. These will fall into three categories:
Include debris removal, clean-up costs and any expenses that you may incur for experts who assist you in the process of establishing your loss for tax and insurance purposes. Depending on the terms of any insurance, some or all of these costs may be reimbursed.
Record all expenditures related to replacing any items lost, whether they are personal property (contents) or structure related costs.
Validate credentials and reference check experts
Make detail notes in your journal of all conversations. Identify the time point of all conversations and events. The time sequence may later be important information.
Especially for events that occur late in the year, contact your tax professional to determine the time-frames that sensitive tax reporting may be required. Additionally, certain non-income tax deadlines may be extended due to the event.
Preserve All Evidence of the event. Photograph evidence before and during clean-up. Physical evidence can be moved if a hazard, but not destroyed.
This material was contributed 4by John Trapani. A Certified Public Accountant who has assisted taxpayers since 1976, in analyzing and reporting transactions of the type covered in this material.
© 2011, John Trapani, CPA,
All rights to reproduce or quote any part of the chapter in any other publication are reserved by the author. Republication rights limited by the publisher of the book in which this chapter appears also apply.
Certified Public Accountant
2975 E. Hillcrest Drive #403
Thousand Oaks, CA 91362
(805) 497-4411 E-mail John@TrapaniCPA.com
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