Unfortunately, many New Mexicans are experiencing natural disasters. A wildfire on track to become the largest in the state’s recorded history is threatening Las Vegas while another is closing in on Los Alamos. Many residents are preparing themselves and their homes, but how can you prepare financially? If you don’t have a plan, you’re not alone. Around 40% of Americans don’t have an emergency plan to respond to disasters, yet 55% worry about an unexpected financial emergency.
From keeping copies of important documents to having cash on hand, there are several steps you can take to better handle the financial impacts of natural disasters. Read on for essential tips to use now, during a disaster, and as you recover.
Ahead of Time:
1. Keep a small amount of cash on hand.
During a disaster, you may not be able to use debit or credit cards. And you may not have access to ATMs, or they may be out of service. Considering that, keep a small amount of cash available in small bills to spend on supplies, fuel, or food.
2. Keep essential documents safe.
You should protect essential documents from destruction. That could mean stashing them in a safety deposit box or a waterproof, fireproof container, or making digital versions to store on an external drive or in the cloud. Here are the types of documents you may need:
- Photo IDs (Driver’s licenses and or passports)
- Birth certificates
- Social Security cards
- Marriage license/divorce decree
- Green card/Naturalization documents
- Proof of military service
- Pet ID tags, proof of pet ownership (such as registration or adoption papers)
- Mortgage records
- Tax statements (these may be necessary to apply for FEMA disaster assistance)
- Copies of health insurance information
- Immunization records
- Proof of prescriptions
3. Review your insurance policies.
Make sure you have homeowners’ or renters’ insurance. Review the types of coverage and amounts to make sure the policies meet your requirements for every type of disaster you may encounter. Flood insurance, for example, must often be purchased separately. While New Mexico is not often prone to floods, it can be a secondary effect from wildfires.
4. Protect your property.
Take photos or videos of your property so that it can be assessed and properly valued in the event of loss. If you have receipts, store them digitally and/or in a waterproof, fireproof container.
During a Disaster:
1. Contact lenders.
Your lenders — including credit card companies and mortgage holders — may not know you’ve experienced a natural disaster. Late payments could accrue expensive late fees, raise your interest rates, and/or ding your credit. To avoid this, reach out to learn about payment options. Many lenders will negotiate extensions; however, you must communicate with them to avoid potential problems.
2. Contact your insurance companies.
Reach out to your homeowners’ or renters’ insurance holders as soon as possible so they can begin assessing your claim.
In a natural disaster, expenses tally up quickly. These expenses may include emergency housing, replacing items like clothing, food, and missed income due to time off work. However, half of Americans wouldn’t be able to cover an unexpected $400 expense. It’s wise to build up an emergency savings fund. Ideally, you’d have six months of income in your account. Even if you haven’t accumulated that much (or saving that amount seems dauting), any savings is better than none.
2. Apply for disaster relief.
Reach out to disasterassistance.gov to see if you qualify for financial disaster relief.
3. Be cautious of scams.
Unfortunately, natural disasters bring out fraudsters hoping to take advantage of people down on their luck. Be wary of sharing your personal information.
To further prepare your finances, use the step-by-step guide in the Emergency Financial First Aid Kit. For more information on preparing for every aspect of natural disasters — especially wildfires — visit ready.gov.