Where to turn when a natural disaster upends your finances

NerdWallet staff

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 compa- ny 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 sever- al private student loan lenders have natural disaster forbearances for these situations.

If your or your family’s finances were affected, con- tact 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 pur- chase 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