Who to turn to when a natural disaster upsets your finances


Natural disasters can disrupt lives in an instant, but repairing the financial damage can take months. Yet those affected have many sources of help.

Here’s how you can get help and be strategic with your resources when you start to rebuild after a disaster.

Take care of immediate needs first.

First, contact the Federal Emergency Management Agency for assistance through a disaster recovery center by texting your zip code and “DRC” to 43362. Texting “Apple” or “Android” to the same number, you’ll get a download link for a FEMA mobile app with additional resources, such as shelter locations.

Local and state agencies and nongovernmental groups such as the Red Cross can also help; call 211 from any phone or visit 211.org for information.

Also check your credit card or hotel loyalty accounts. You could have points or a free night certificate. Most hotel loyalty programs have offered generous expiration date extensions for certificates that have not been used due to the pandemic. And some general rewards credit cards allow you to use points to book hotels directly through their own travel portals or allow you to transfer points to a specific hotel loyalty program.

Next, take care of the financial issues.

As soon as possible, turn to managing your finances. FEMA offers unemployment assistance, housing assistance, legal services and more. You have several ways to register, including online at Disasterassistance.gov, through the FEMA app, at a disaster recovery center, or by phone at 800-621-3362.

The nonprofit credit counseling agency Money Management International offers a free program called Project Porchlight that provides disaster relief support for up to one year. The program helps people navigate an unfamiliar process, meet deadlines, and resolve the trauma that makes task management more difficult.

You have several tasks to manage:

Contact the insurers as soon as possible.

Act quickly to get the most out of your home insurance, tenant insurance or car insurance.

Review your policies for the types of damages covered, coverage limits and deductibles. Home and renters insurance policies usually don’t cover flood damage, so check flood insurance as well. Flood and wind damage to your car are covered as long as you have comprehensive coverage on your auto insurance policy.

Report the damage to your agent or insurance company as soon as possible, Mark Friedlander, director of corporate communications for the Insurance Information Institute, said in an email. Insurers will face a glut of claims, so the sooner you file, the better.

Ask about your coverage, how long it will take to file and process a claim, whether the claim will exceed your deductible, and whether you’ll need estimates for structural damage repairs, Friedlander said. You should find out about living expenses coverage if you are displaced and car rental reimbursement. Some insurers will also cover the loss of spoiled food.

When talking to your insurer, ask them what you can throw away and what you need to document for your claim. Take photos and videos of the damage, then do what you can to protect your property, Friedlander said. Take detailed notes on every interaction you have with the insurance company.

Call your mortgage company and other creditors.

If you’re concerned about your ability to make monthly mortgage payments, contact your mortgage agent as soon as possible — before you miss a payment — to discuss mortgage forbearance options.

Forbearance is a means of avoiding foreclosure and may allow you to make partial payments or suspend payments entirely for an agreed period of time.

Proactively communicate with creditors, Bruce McClary, spokesperson for the National Foundation for Credit Counseling, said in an email. Impassable roads and outages of electricity, Internet access and telephone service are all factors that can hinder payment on time. “Once your creditor is aware of these things, they may be able to offer temporary payment relief,” McClary said. Hardship programs may waive fees or reduce your interest rate for a period of time.

Because cash is king in areas where electricity and communications are down, you may need to use your credit card to withdraw cash from an ATM. Just be aware that this usually results in a higher interest rate, McClary said.

Look for a break in student loans; contact your college for assistance.

Federal student loan repayments remain suspended until January. But many private student lenders have natural disaster forbearances for these situations.

If your or your family’s finances have been affected, contact your school’s financial aid office. Ask about professional judgment, which will reassess eligibility for financial assistance due to changed circumstances. You can also apply for more immediate money through your school’s emergency financial aid fund.

If you are relocated, notify the financial aid office of your change of residence. Notify your teachers and advisor about changes to your ability to take classes or complete classes.

Be strategic with aid, credit, and debt as you dig.

“Rebuilding and repairing after a disaster can be incredibly expensive, even for those who have insurance,” Kate Bulger, senior director of business development for MMI, said in an email. “Requesting as much help as possible and preserving cash today means consumers will have more funds when they are ready to rebuild.”

Once you’ve exhausted the assistance and your emergency fund, you’ll likely have to rely on credit to buy necessities or repair damage. Lately, some major credit card issuers make it easier (and cheaper) to turn your available line of credit into an installment loan, often at a lower ongoing interest rate. Or you might be allowed to split a large emergency purchase into predictable monthly payments.

When the picture of your debt becomes clearer, consider strategies for paying off balances. The debt snowball, where you focus your efforts on the smallest debt first while maintaining minimum payments on others, can give you quick wins and motivation.

Finally, be aware of debt relief options to deal with amounts that exceed your ability to repay.

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This article was provided to The Associated Press by personal finance website NerdWallet.

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