Where to Turn When a Natural Disaster Upends Your Finances

Act quickly to get free aid first, then turn to financial tasks like contacting insurers and creditors.
NerdWalletSep 1, 2021

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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 .

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 also can also help; call 211 from any phone or visit 211.org to get information.

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 , 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.

And you do have several tasks to handle:

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.

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. 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.

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

If you 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.

“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. “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.”

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 for contending with amounts that are beyond your ability to repay.

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