In the wake of a natural disaster, accessing financial aid and housing assistance is crucial for individuals and families. While disaster assistance is available in many forms, navigating the various programs and how to get help can be confusing and overwhelming.
In this article, the Financial Counseling Association of America (FCAA) offers guidance on preparing for a disaster and accessing disaster recovery resources.
Disaster preparedness – the best defense is a good offense
“There are two flavors of disaster counseling – disaster assistance and disaster preparedness,” explains Emanuel Rivero, vice president at Money Management International, an FCAA member agency. People often overlook the preparedness aspect.
Ana Garcia, deputy director at Consumer, another FCAA member, underscores the importance of having a family plan in case of emergency. The Puerto Rico-based agency was in the thick of the crisis when Hurricane Maria hit the island in 2017.
“Expect the worst, the unheard, the unexpected. We lost ALL communication, no cell lines, no land lines, no TV. We lost our weather radar, so there was no way of knowing what was happening and no way to communicate with family, neighbors nor community,” Garcia recalls. “Plan ahead by going back to basics. Keep a battery radio and, if possible, satellite devices. Keep an emergency reserve in cash. Banks and ATMs were out and credit card systems were down.”
Most people never expect to experience devastation from a natural disaster or other severe weather event. However, with climate-related emergencies on the rise across the country, it is wise to anticipate the types of events that could occur in your area. Whether you’re susceptible to hurricanes, wildfires, floods, earthquakes or tornadoes, being prepared in advance is the first important step.
Professional credit counselors encourage consumers to safeguard their homes, finances and personal well-being before a disaster strikes. Take these steps for disaster preparedness:
Personal Safety
- Assemble an emergency supply kit with essential items: water, non-perishable foods, medications and first-aid supplies, flashlights, batteries and important documents. Get more tips on building your emergency kit.
- Plan for the special needs of any children, pets, elderly or individuals with disabilities.
- Create a list of important contacts with contact information, including family members, neighbors, local emergency services and utility companies.
- Plan your evacuation routes in advance and discuss meeting places with family and friends.
Securing Your Home
- Consult with experts for recommendations on reinforcing your home to withstand disasters. This may include reinforcing roof connections and installing storm shutters over windows to protect against wind and rain. It may also involve clearing vegetation and selecting fire-resistant siding and roof materials in the event of wildfires.
- Review your home or renter’s insurance to make sure you have adequate coverage and understand any exclusions for climate-related damage.
- Make sure your home is in your name and you have a copy of the deed showing a clear title. Some homes are passed down through generations with no clear proof of ownership. Having a so-called “tangled title” can make it difficult to gain access to insurance money or grants for rebuilding after the disaster.
- Know how to turn off your gas, electricity and water in case of emergency.
Financial Safeguards
- Protect your important financial documents by storing copies in a secure, waterproof and fireproof location.
- Establish an emergency fund to cover unexpected expenses such as temporary housing and/or home repairs from weather or fire damage.
- Plan for potential disruptions to your income and employment.
- Contact a credit counselor for help getting your budget, debt and savings in a good place so you can withstand the financial impact of a natural disaster.
“It’s unrealistic for most people to have six months of living expenses tucked away in savings,” says Rivero. “In fact, many individuals have nothing in savings, and 50 percent of those who do have less than $750.”
FCAA’s certified credit counselors can help individuals get out of debt and begin building an emergency fund. Counselors work with individuals to understand their financial situation, sometimes recommending a debt management plan (DMP) for those struggling to pay off debt.
A DMP structures monthly payments that are affordable and can actually help improve the person’s credit score over time. With a good credit score, individuals have more financial flexibility in the event of a disaster.
Getting help in the aftermath of a disaster
The Federal Emergency Management Agency (FEMA) has traditionally brought day-one assistance to individuals and communities in the event of a major disaster. FEMA workers are the first boots on the ground, providing financial and direct assistance to help with food, water, housing, repairs and other needs.
Furthermore, FEMA connects people with first responders and other support resources, like the American Red Cross. FEMA also maintains good relationships with credit counseling agencies (CCAs) across the United States, which can guide individuals in obtaining financial assistance and/or loan relief after a disaster strikes.
While this has traditionally been FEMA’s role, federal budget cuts may impact what the government agency will be able to do in the future. Therefore, it is critical to be aware of other organizations that offer disaster recovery assistance.
Various agencies and other organizations offering disaster relief programs include:
- American Red Cross
- Institute for Sustainable Development
- USA.gov
- U.S. Small Business Administration
- Fannie Mae
- U.S. Department of Housing and Urban Development
- Emergency response and recovery agencies in your state, county or municipality
Credit counselors step up in times of emergency
The FCAA represents many CCAs that work with local and state governments to ensure that funding is available for inevitable climate disasters.
“While CCAs typically counsel consumers who are in trouble with credit card debt and other unsecured loans, many will shift their focus in the moment to help individuals in the aftermath of a disaster,” according to Rivero. “We understand that people need financial information to address their immediate needs. Discussions about debt accumulation can come later.”
Linda Davis-Demas, vice president of Housing at BALANCE agrees. “Agencies are aware of the funding and programs that are out there. They also understand the process and can guide individuals on the right questions to ask their insurance company, finding access to assistance programs, and contacting their creditors for loan forbearance.”
Housing counseling – a subspecialty of credit counseling
“Many of our credit counseling agency members offer HUD-certified housing counseling,” said Lori Pollack, executive director of the FCAA.
If the person’s home is uninhabitable following a disaster, counselors can assist in finding temporary or permanent alternative housing options. They may also be able to help individuals negotiate mortgage forbearance and explore options for refinancing or modifying their loan.
“It’s important to remember that everything goes very, very, very slowly when it comes to disaster assistance,” said Russell Graves, executive director of the National Foundation for Debt Management, a member of FCAA. “Federal aid does not come for months or years, but local and state assistance can happen faster.”
When to talk with a professional credit counselor
Non-profit credit counseling agencies offer personalized guidance to help clients rebuild their lives and achieve long-term financial stability. Whether it’s paying down debt and improving your credit score, budget planning to start an emergency savings fund or finding assistance after a disaster, the FCAA can connect you with a counselor you can trust.