Rebuilding Your Personal Finances after a Disaster
In the days following a disaster, your first priorities are the safety of you and your family, and meeting your day-to-day needs. But as help arrives and rebuilding begins, it is important to take smart and decisive steps to start putting your life back together.
We know how much you want to be back in your home and have life back to normal. You should, however, realize the truth of your situation and avoid rushing to get everything repaired. Getting squared away takes time. When you rush, you make mistakes and open yourself to potential fraud.
The following checklist from the Consumer Financial Protection Bureau (CFPB) will help guide you through some of the financial decisions you will need to make in the wake of disaster.
Before the Storm
- Make sure you have a copy of all insurance policies available to reference. If utilities go out and mail service is unavailable, you won't be able to verify your coverages.
- Ensure that you have an adequate supply of envelopes, stamps and payment coupons for your mortgages and other loans.
As Soon As Possible After the Storm
- If you have storm damage, contact your insurance company right away to start the claims process. Insurance reimbursements take time under the best of circumstances but take even longer during mass casualties.
- Look at your bills and set priorities. Your mortgage, rent and insurance payments should stay high on your list. Damage to your property does not mean you stop payments, which could cause you to lose your property, even if it is fully insured.
- If your income is interrupted and you don't think you will be able to pay your credit cards or other loans, be sure to contact your lenders as soon as possible. Explain your situation and when you think you will be able to resume normal payments. The important thing is to make the calls before your next payments are due. You may wish to follow up any phone calls with certified mail to document your communications, especially with your mortgage and insurance companies.
- If you don't have a monthly mortgage statement or coupon book with you, search the Mortgage Electronic Registration Systems (MERS) or call toll-free at (888) 679-6377 to find the company that services your mortgage.
- If you are in a presidentially declared disaster area, you may qualify for disaster assistance. Check with the Federal Emergency Management Agency (FEMA) for more information.
- If your home is damaged to the point that you can't live in it, contact your utility companies and ask to suspend your service. There is no use paying for services you can't use.
As You Rebuild
Most consumers choose to use an adjuster hired by the insurance company. Be careful if you choose to hire a public adjuster to help with your insurance claim and ensure the adjuster is licensed to do business in your state. Watch out for these red flags:
- Big upfront fees.
- References to specific contractors who can help with repairs.
- False, suspicious or inflated claims.
- Asking for a suspicious amount of personal information.
You should always get bids from several local and well-established contractors. Avoid contractors who:
- Work door-to-door
- Come from out of state
- Don't provide a physical address and phone number
- Refuse to show identification
There are a few things you should always remember when dealing with contractors:
- Make sure the contractor has all required licenses and get license numbers.
- Check with your state licensing agency's website or hotline to make sure all licenses are still valid.
- Ask the licensing agencies if the contractor has a history of complaints.
- Never pay for the job in advance and don't make large deposits. Pay once the job has been completed satisfactorily. Don't be afraid to get an independent inspection of the work before you pay.
- Don't pay in cash.
- Don't sign anything before carefully reading it. If someone is trying to get you to sign before you have had a chance to read, walk away and work with someone else.
- Don't give personal financial information, such as your checking account, credit card or debit card numbers.
- If you have to borrow money to pay for repairs, don't let the contractor steer you toward a particular lender. Always consider working with your local credit union for low-cost loans