Post-Natural Disaster Money Tips

Flood, fire, earthquakes and other natural disasters can wreck havoc with your personal life - including your finances. The following tips can help organize your thoughts and tasks during this difficult time.

Insurance

• Review your insurance coverage and file claims as soon as possible.
• If you have trouble understanding your policies, consider hiring a licensed public adjuster. He or she can help you understand your coverage, submit paperwork and act as a personal advocate. There is a fee for the service, but it could be worth it.

Credit

• Take inventory of your credit cards. If you cannot locate them, call the issuers immediately to report them missing.
• Use credit cards prudently. You may not have the means to repay large balances later.
• Know your credit limits. If you absolutely have to exceed them, request higher limits rather than going over. Doing so can help you avoid costly penalties.
• Avoid using cash advances. Since interest (typically at a much higher rate than for purchases) accrues immediately, they are a pricey way to acquire funds.
• Beware scams. Pass on credit and loan offers that seem too easy to obtain, list a 900 number (you could be calling out of country and be charged $4 a minute or more), or have to pay before receiving money. If you need a loan, contact lenders you know and trust.
• Reject unsolicited and fee-based offers to fill out loan and grant applications. If you need assistance, go through your financial institution or other reputable organization.
• Do not reveal your Social Security number, credit card information (number and expiration date), or checking account number over the telephone unless you made the initial phone call.

Income and expenses

• Develop a financial priority list. Your budget may be seriously affected by reduced income and increased expenses, so consider each line item carefully.
• Keep the bulk of your money in your financial institution. Cash in pocket is far riskier than cash in a checking or savings account.
• If you are unable to meet all your financial obligations, communicate with your lenders as soon as possible - you could save your credit history from future damage. In a letter to each:
  
  • Explain your situation in detail.
  • Request specific solutions. Depending on your circumstances, ask for either reduced or suspended payments. Be realistic - never propose more than you can afford to pay.
  • Include the date that you would be able to resume normal payments (if possible).
  • Include relevant documentation.
  • Keep copies of all correspondence.
  • Update your lenders regularly.