Floods, earthquakes, terrorist attacks, riots and such other natural or manmade disasters have repeatedly played havoc with the lives and finances of many people in the past. And these calamities will happen time and again in future too.

People, who have gone through these traumatic experiences, have become wiser after the incident. We should be learning from their experiences and get prepared for such eventualities.

The problem, however, is that most of us live under the false belief that 'this cannot happen to me'. In the process we expose ourselves to the risk of huge losses apart from lot of inconvenience.

It is, therefore, in our interest and also those near and dear to us, to take some basic precautions to mitigate such losses. As some wise person rightly remarked 'A stitch in time is better than nine later'.

Have an emergency fund

You are already under lot of tension, when a disaster strikes. You may need to go out of city if floods strike or you may have to pay advance at a hospital in case of medical emergency. In such situations, easy availability of money will ease a lot of your burden.

Depending on your needs, you can keep aside a certain amount in cash and bank savings account. Have an ATM card so that you can access this money anytime. Usually, about 2-3 months of your average monthly expenses are sufficient to take care of emergencies. Meanwhile, you get time to arrange for additional money, if need be.

You could also have a credit card, which may be used only under emergency. It is quite a safe and convenient option to cash or a bank deposit, where the money is lying idle.

Maintain your documents properly

The originals of the insurance policies, passport, bank statements, investment related papers, home title deeds, driving licence and other such important papers, should be kept secure in a water and fireproof safe. They should also be easily accessible.

A copy each of the same should be kept in a bank locker, with your lawyer and also a friend or relative, preferably in a different city. In case the originals are lost or damaged, you can easily get a duplicate.

Further, details of these should also be known to your family members.

In case say you are hurt and hospitalized, prior knowledge will help them to easily get these documents. Moreover, they will be fully aware of your financial dealings and will not miss out on anything important in your absence.  

Take proper insurance cover

These days many types of insurance covers are available – life, disability, medical, vehicle, house, household items etc. Moreover, they are quite cheap and affordable.

You must, therefore, ensure that you are adequately insured. The insurance cover for your life must be such that, in case of any unfortunate eventuality, your family has sufficient funds to be financial secure.

Medical expenses can be quite exorbitant nowadays. Mediclaim cover can come very handy in such circumstances.

Besides, your house, vehicles and other expensive belongings should also be properly insured.

However, take care that you buy the right policies with the right sum assured and all types of likely risks are covered. For example, in order save on the premium, people exclude some risks say flood. In such cases, you will not be eligible for any claim for a damage caused by flood.

Automate your life

Today, one can automate a whole lot of things.

We can access and operate one's account online from anywhere in the world. We can set-up instructions for auto payment of our credit card bills, home loans, credit card bills etc.

One could make use of these facilities, which will continue to operate in our absence. In fact these can be pretty useful, not only during disasters, but in our day-to-day life too.

Be wary of fraudsters and robbers

It is sad fact of life, but true, that some people do take advantage of disasters to loot the unfortunate victims.

It may, therefore, be prudent to contact your friends and family to come and support you. Take all help possible to protect yourself from unscrupulous elements.

Contact your creditors

You would always be having some bills due for electricity and telephone. There could also be credit card amounts due, home loan, car loan etc.

Considering the type of disaster, you could have some problem in making these payments on the due date. It could either be short-term financial problem. Or even a technical one – say you can't access your bank account due to floods.

In such cases, your may keep your creditors informed about your problem and the delay. This will be quite appreciated by them.  

Have a contacts list ready

Keep handy a detailed list, with addresses and phone numbers, of some of the key persons, such as your insurance agent, broker, banker, lawyer, doctor, etc. They are all aware of some important aspect of your life. As such one can contact them and seek their assistance, in case of any emergency.

We cannot, of course, prevent any disasters. They are beyond our control and we can only hope and pray that we are spared from them.

But the least we can do is be prepared for them. This will help us to minimize any losses and inconveniences. It will also help us to put back our life back on rail much faster.

The author, Sanjay Matai is an investment advisor. You can reach him at sanjay.matai@moneycontrol.com.