Where to turn when a natural disaster upends your finances

Sep 1, 2021, 4:22 AM | Updated: 4:55 am

Natural disasters can upend lives in an instant, but unwinding the financial damage can take many months. Still, those affected have many sources of help.

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

Deal with immediate needs first.

First things first: Contact the Federal Emergency Management Agency to get help via a disaster recovery center by texting your ZIP code and “DRC” to 43362. Texting “Apple” or “Android” to that same number will give you a download link for a mobile app from FEMA 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 to get information.

Check your credit card or hotel loyalty accounts as well. You might have points or a free night certificate. Most hotel loyalty programs have offered generous expiration date extensions for certificates that have gone unused 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 let you transfer points to a specific hotel loyalty program.

Next, tend to financial issues.

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

Nonprofit credit counseling agency Money Management International has a free program called Project Porchlight that offers disaster victims support for up to a year. The program helps people navigate an unfamiliar process, stay on top of deadlines and address the trauma that makes handling tasks harder.

You do have several tasks to handle:

Contact insurers as soon as possible.

Act quickly so you can get the most out of your home insurance, renters coverage or auto insurance.

Review your policies for types of damage covered, coverage limits and deductibles. Home and renters policies typically do not cover flood damage, so check for flood insurance as well. Flood and wind damage to your car are covered as long as you have comprehensive insurance on your auto policy.

Report 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 face a glut of claims, so the sooner you file, the better.

Ask about your coverage, the time frame for filing and processing a claim, whether the claim will exceed your deductible and if you’ll need estimates for repairs to structural damage, Friedlander said. You should ask about coverage of living expenses if you are displaced and reimbursement for a car rental. Some insurers will also cover the loss of spoiled food.

When you talk to your insurer, ask what you can throw out and what you should document for your claim. Take photos and video of the damage, then do what you can to protect your property, Friedlander said. Take detailed notes about every interaction you have with the insurance company.

Call your mortgage company and other creditors.

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

Forbearance is a way to avoid foreclosure and may allow you to make partial payments or pause payments entirely for an agreed-upon period of time.

Communicate proactively with creditors, said Bruce McClary, spokesman for the National Foundation for Credit Counseling , in an email. Impassable roads and outages to power, internet access and phone service are all factors that can hinder paying on time. “Once your creditor is aware of these things, they may be able to offer some temporary payment relief,” McClary said. Hardship programs may waive fees or lower your interest rate for a time.

Because cash is king in areas where power and communication are disrupted, you might have to use your credit card to get cash from an ATM. Just be aware that typically carries a higher interest rate, McClary said.

Seek a pause in student loans, contact your college for aid.

Federal student loan payments remain paused through January. But several private student loan lenders have natural disaster forbearances for these situations.

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

If you’re displaced, notify the financial aid office of your change in residence. Let your teachers and advisor know about changes to your ability to attend classes or complete coursework.

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

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

After you exhaust aid and your emergency fund, you’ll likely need to rely on credit to afford necessities or repair damage. Lately, some major credit card issuers are making it easier (and cheaper) to turn your available credit line into an installment loan, often at a lower ongoing interest rate. Or you might be allowed to break up a large emergency purchase into predictable monthly payments.

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

Finally, be aware of debt relief options for contending with amounts that are beyond your ability to repay.


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


NerdWallet: Find Financial Help After a Disaster https://bit.ly/nerdwallet-financial-help

Federal Disaster Assistance: https://www.disasterassistance.gov/

NerdWallet: What Is a Credit Card Hardship Program? https://bit.ly/nerdwallet-hardship-program

NerdWallet: Debt Relief: Understand Your Options and the Consequences https://bit.ly/nerdwallet-debt-options

Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


FILE - Chinese President Xi Jinping, left, and Hong Kong's new Chief Executive Carrie Lam attend th...
Associated Press

China’s Xi to visit Hong Kong for handover anniversary

BEIJING (AP) — Chinese leader Xi Jinping will visit Hong Kong this week to celebrate the 25th anniversary of the former British colony’s 1997 return to China, a state news agency said Saturday, in his first trip outside the mainland since the start of the coronavirus pandemic 2 1/2 years ago. Xi also will attend […]
21 hours ago
FILE - Planes sit on the tarmac at the Des Moines International Airport, Monday, June 13, 2022, in ...
Associated Press

Airlines aim to shift blame for flight problems to FAA

DALLAS (AP) — Airlines under scrutiny for widespread flight disruptions are renewing their criticism of the government agency that manages the nation’s airspace, saying that understaffing at the Federal Aviation Administration is “crippling” traffic along the East Coast. Airlines for America, which represents the largest U.S. carriers, said Friday it wants to know FAA’s staffing […]
21 hours ago
FILE - Investigators search for evidences outside Robb Elementary School in Uvalde, Texas, May 25, ...
Associated Press

Graduating Uvalde High School class remembers slain children

UVALDE, Texas (AP) — Almost 300 high school seniors received their diplomas Friday in Uvalde in the shadow of the massacre of 19 elementary school students and two children 5 1/2 weeks earlier. The red-gowned Uvalde High School seniors sat in 100-degree heat at the school stadium with 21 “Uvalde Strong” placards arrayed before their […]
21 hours ago
Nancy Lee Grahn arrives with the words "Reproductive Freedom" on her body and carries a purse with ...
Associated Press

‘General Hospital’ sweeps supporting nods at Daytime Emmys

PASADENA, Calif. (AP) — Two “General Hospital” actors have won supporting honors at the Daytime Emmy Awards. Kelly Thiebaud plays Dr. Britt Westbourne and Jeff Kober portrays Cyrus Renault on the ABC drama. A gleeful Thiebaud won on her first nomination Friday night. “I cannot believe this. I am so shocked,” she said. “My brother, […]
21 hours ago
Associated Press

California GOP Rep. Valadao advances in US House district

LOS ANGELES (AP) — Rep. David Valadao advanced Friday to a November runoff in a Democratic-tilting district in California’s Central Valley, surviving a challenge from a fellow Republican who faulted the congressman for his vote to impeach then-President Donald Trump. With most of the votes tallied in the 22nd District, Valadao had about 26% of […]
21 hours ago
A vial of the Moderna COVID-19 vaccine for children 6 months through 5 years old is seen, Tuesday, ...
Associated Press

Moderna COVID-19 shots now an option for older kids in US

NEW YORK (AP) — There is now a second COVID-19 option for kids ages 6 to 17 in the U.S. The Centers for Disease Control and Prevention on Friday announced it is recommending Moderna shots as an option for school-age kids and teens. This group has been able to get shots made by Pfizer since […]
21 hours ago

Sponsored Articles


Best retirement savings rates hit 4.30%

Maximize your retirement savings with guaranteed fixed rates up to 4.30%. Did you know there is a financial product that can give you great interest rates as you build your retirement savings and provide you with a paycheck for life once you retire? It might sound too good to be true but it is not; this product is called an annuity.
Arizona Division of Problem Gambling

Arizona Division of Problem Gambling provides exclusion solution for young sports bettors

Sports betting in Arizona opened a new world to young adults, one where putting down money on games was as easy as sending a text message.
Carla Berg, MHS, Deputy Director, Public Health Services, Arizona Department of Health Services

ADHS mobile program brings COVID-19 vaccines and boosters to Arizonans

The Arizona Department of Health Services and partner agencies are providing even more widespread availability by making COVID-19 vaccines available in neighborhoods through trusted community partners.
Where to turn when a natural disaster upends your finances