Financial recovery after Harvey: what you need to know
8 steps to take in Hurricane Harvey’s wake – or keep on hand for a future disaster
By Andrew Housser
As the Harvey superstorm begins to recede this week, the recovery process is just beginning for millions of people in Texas and Louisiana. For some, the process is all too familiar. Last week also marked the 12th anniversary of Hurricane Katrina. Dozens of other storms, of all types, have affected the nation in recent years.
In the coming days, the sun may come out again, but the forecast for people’s financial recovery from the storms and flooding is cloudier. The total cost of rebuilding after Harvey could total $40 billion. That is even more than the costs after Hurricane Katrina.
Experts estimate that just one in five homeowners has flood insurance. That means residents of Houston and the surrounding areas who lose property because of flooding likely will need to pay for the costs of rebuilding. The total cost of rebuilding does not account for the ripple effect of the disaster, either. Businesses are damaged or unreachable; jobs may be lost; and destroyed cars and other property will make it difficult to get around.
If you or someone you know is struggling to recover after Harvey or another natural disaster, these steps can help regain financial footing.
Find stability. It is most important to establish stability after a disaster. To keep yourself and your family as safe and healthy as possible, reach out to level-headed, extended family and friends. They can help you make a plan of action. For some, the best option might be to move to another community temporarily or permanently. Others might dive right in to cleaning up their homes and neighborhoods. Be sure to learn the status of your job from your employer.
Identify and secure help for you and your family. Depending on what you experienced, different types of help are available. Once you are safe and have at least a temporary place to stay, you can get assistance for other needs. The Red Cross and United Way can help secure housing and clothing after a natural disaster. Your community or other nonprofit organizations might have resources for medical care or counseling at low or no cost. If you lost your job and are in debt, find out if you qualify for assistance with food stamps and public health insurance. You can see a comprehensive list of options for help in the areas affected by Hurricane Harvey at https://www.texastribune.org/2017/08/28/hurricane-harvey-relief-efforts-how-help/.
Understand your insurance. Most homeowners’ and renters’ insurance policies cover storm damage. The catch is that this coverage only includes water damage when the water enters your home because of wind or other above-ground causes. Reimbursement for water damage caused by flooding – water that travels on the ground, such as from Tropical Storm Harvey’s extensive rainfall – usually requires special flood insurance coverage. If you have purchased flood insurance from the government, you can file a claim at https://www.fema.gov/nfip-file-your-claim. Contact your home and auto insurance company to inform them about your losses.
Apply for financial assistance. In a major disaster such as Harvey, government agencies usually declare a disaster area. People who live in the region may be eligible for financial assistance, from grants to loans. It is a good idea to apply immediately for financial assistance is you think you will need it. The process may take months. Begin by searching for your address and completing a questionnaire at https://www.disasterassistance.gov/.
Document damage and communication. Anytime you are managing a financial crisis, keep good records. Record every action you take and every communication you have, whether with a medical provider, an insurance adjustor or a government agency. Take photos or video of the damage. If possible, keep damaged items you are filing claims for (such as ruined rugs and furnishings) until an insurance adjuster inspects them. Keep copies of letters and emails, and request delivery confirmation for anything you mail.
Be wary of scammers. Predators often take advantage of people after a disaster. They may offer to repair or rebuild a home, or claim to be a FEMA inspector. Be sure to thoroughly investigate any contractor before engaging their services. Also be aware that insurance inspectors will not charge you to inspect your property – you have already paid for their services with your insurance premiums.
Contact your lenders. If you are a homeowner, contact your mortgage company and let them know how you are affected. If you will have trouble making any other payments on time, contact those creditors and ask if they can offer any help. Several banks are waiving ATM fees in the Houston area. In addition, Wells Fargo announced on Aug. 28 that it would suspend negative credit reporting for people in the Harvey area for at least a month. Customers who contact the company can get 60 to 90 days of disaster relief – such as suspended payments – and other relief on a case-by-case basis.
Get debt help if you need it. Some people may find themselves struggling more after a disaster. If you cannot make even minimum payments on your debts, or if you have so much debt that you cannot pay it, consider getting help. Investigate your options, including debt negotiation or debt settlement, a debt management plan, or even bankruptcy, to see which might work for you. Meanwhile, try to avoid using credit cards so that you do not exceed your ability to make payments.
Some good news: Most people had only a small dip in their credit score after Hurricane Katrina, studies have shown. That indicates that if you had good credit before a natural disaster, you can regain it. Remember that every day of forward movement will bring you closer to recovering from a disaster.
|Andrew Housser is co-founder and CEO of Freedom Financial Network. The family of companies, providing innovative solutions that empower people to live healthier financial lives, includes Freedom Debt Relief and Bills.com. Housser holds a Master of Business Administration degree from Stanford University’s Graduate School of Business, and a Bachelor of Arts degree from Dartmouth College.|