Natural disasters can devastate lives in an instant, but repairing 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 rebuilding after a disaster.
Treat immediate needs first
First: contact the Federal Emergency Management Agency for help via a disaster recovery center by sending your zip code and “DRC” by SMS to 43362. Send by SMS to “Apple” or “Android At that same number will give you a download link for a FEMA mobile app with additional resources, such as shelter locations.
Local and state agencies and non-governmental 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.
Then take care of the financial issues
As soon as possible, move on to managing your finances. FEMA offers unemployment assistance, rental assistance, legal services and more. There are 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 has a free program called Project Porchlight that provides disaster relief support for up to one year. The program helps people navigate unfamiliar process, meet deadlines, and deal with trauma that makes task management more difficult.
And you have several tasks to manage:
Contact the insurers as soon as possible
Act quickly to get the most out of your home insurance, home insurance or auto insurance.
Review your policies for the types of damage covered, coverage limits and deductibles. Home and tenant insurance policies generally don’t cover flood damage, so check for flood insurance as well. Flood and wind damage to your car is covered as long as you have full insurance on your auto policy.
Report the damage to your agent or insurance company as soon as possible, said Mark Friedlander, director of corporate communications for the Insurance Information Institute, in an email. Insurers will be faced with an overabundance of claims, so the sooner you file, the better.
Find out about your coverage, how long it takes 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 inquire about coverage for living expenses if you are relocated and reimbursement for a rental car. 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 are 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 way to avoid 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 blackouts of electricity, Internet access and telephone service are all factors that can hamper payment on time. “Once your creditor is aware of these things, he may be able to offer temporary relief from payments,” McClary said. Hardship programs may waive fees or lower your interest rate for a period of time.
Since cash is king in areas with disrupted electricity and communication, you may need to use your credit card to get cash from an ATM. Just be aware that the interest rate is usually higher, McClary said.
Look for a break from student loans, contact your college for help
Federal student loan payments remain suspended until January. But many private student loan lenders have natural disaster forbearances for these situations.
If your finances or those of your family 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 money immediately through your school’s emergency financial aid fund.
If you are moved, inform the financial aid office of your change of residence. Let your teachers and advisor know about changes to your ability to attend or complete lessons.
Be strategic with aid, credit and debt while you dig
“Rebuilding and repairing after a disaster can be incredibly expensive, even for those with insurance,” says Kate Bulger, senior director of business development for MMI. “Asking for as much help as possible and saving the cash today means consumers will have more cash when they are ready to rebuild. “
When you run out of aid and your emergency fund, you will likely have to rely on credit to pay for necessities or repair damage. Lately, some large card issuers are making it easier (and cheaper) to turn your available line of credit into an installment loan, often at a lower outstanding interest rate. Or you might be allowed to split a big emergency purchase into predictable monthly payments.
When your debt situation 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 the others, can give you quick wins and motivation.
Finally, be aware of debt relief options for dealing with amounts that are beyond your repayment capacity.