It's hard to think about money while residents of Houston and surrounding towns deal with the emotional, mental, and physical fallout of Hurricane Harvey. But taking care of one's financial health after a natural disaster is another important household priority.
That priority is in the aftermath of one of the most destructive natural disasters Mother Nature has ever delivered to the U.S.
Rebuilding an estimated 200,000 Houston area homes that were in the path of Harvey alone will cost about $40 billion, according to data from CoreLogic. That doesn't count household valuables that have gone missing or are damaged, especially key documents like stock certificates, cash, insurance policies, and damaged-beyond-repair cars, trucks, and other vehicles. Preliminary estimates by Accuweather put the cost of Harvey-related repairs and insurance claims at $160 billion, which would make it the costliest storm in U.S. history.
If there's a silver lining here, it's that people affected by Hurricane Harvey can address and recover from potential financial disaster as well, in the form of lost documents, tough insurance claims scenarios, and other monetary threats. The keys to doing so, experts say, are awareness, preparation, professional guidance, and a bit of creativity.
Here are the key financial threats common after a natural disaster, and how to avoid them:
Lost Insurance, Mortgage Documents and Invoices, and Credit and Debit Cards
The idea, of course, is to keep critical financial documents stored safely away, in a lockbox, vault, or other secure spot, before a storm like Harvey hits. Fortunately, in the digital age, lost financial documents, bills and payment cards can be easily replaced. But the sooner you act to replace those items, the better. "After first contacting your insurance company, homeowners and car owners with damage should also notify their lenders," advises Greg McBride, chief financial analyst at Bankrate.com. "Late fees are typically waived for those residing in areas impacted by a natural disaster, and in extreme cases monthly payments may be deferred for a period of time."
No Cash or Payment Options
When news of an imminent hurricane rolls out, the best move is to get to the bank, draw down some cash, and have plenty of provisions, especially dry foods, on hand. That's because in areas without power, it's "back to a cash-only economy" after Harvey in terms of securing food, medical supplies and other necessities, says McBride. "Many banks and credit unions will set up mobile ‘branches' so affected consumers are able to access cash or easily apply for loans needed to repair damage," he states. "And these won't involve the typical bankers' hours."
Consequently, call your bank as soon as possible, and discuss your cash and payment options. For instance, Patelco Credit Union, which has about 1,000 members in the greater Houston area, is offering customers $500 cash now, and personal loans at 0% interest. The credit union is offering an additional $10,000 at a very low, special disaster relief rate. See if your bank or credit union is offering a similar deal.
What Houston-Area Banks Are Doing to Help Consumers Impacted by Hurricane Harvey
While Houston area residents hit hard by Hurricane Harvey should first reach out to their own financial institutions for access to cash and credit, and to resolve account issues, some banks and credit unions have already rolled out services and aid for their customers. In addition, the IRS announced some victims of Harvey will be eligible for tax relief.
Here's a snapshot of what some financial institutions are offering Houstonians impacted by the hurricane:
JP Morgan Chase, which has the largest banking presence in the Houston area, will automatically waive or refund late fees for mortgage, credit card, business banking and auto loans and overdraft, monthly service and ATM fees on deposit accounts through Sept. 10. Contact: (888) 356-0023.
Wells Fargo - is waiving ATM fees for customers in the affected areas, as well as reversing other fees — such as late fees — for all of its consumer banking consumer products, including credit cards and checking accounts. "Wells Fargo's mobile response unit also will enter the affected areas once the situation there is stabilized," the bank reports. Contact #: 1-888-818-9147.
Frost Bank — Frost states it will waive overdraft and non-sufficient funds fees incurred from Aug. 28 through Sept. 8. Fees already incurred on Aug. 28 will be refunded, the firm notes on its web site. Houston customers may also make withdrawals at any ATM location without a fee. Contact: 1‑800‑51‑FROST.
NCUA — The National Credit Union Administration, while not actually a credit union, does work directly with the 150 credit unions in the Houston area (as well as 28 more in Louisiana.) Now that both regions have been declared federal disaster areas, the NCUA can help area residents under its disaster assistance policy. Contact: Consumer Assistance Center at #800-755-1030
Dealing with Insurance Claims (and Getting It Right the First Time)
Document your expenses, urges Jon Ulin, managing Principal of Ulin & Co. Wealth Management, a branch of LPL Financial in Boca Raton, Fla. "Save all your receipts if you can't live in your house and make sure to keep detailed records of all additional expenses," Ulin advises. "Some homeowners' policies may cover you for additional living expenses and provide advance payment options. Also, make sure to contact your agent as soon as possible to report your claim and update him or her with your temporary address." Take plenty of pictures of your property, too, Ulin says. Good images showing the severity of your problem can often "fast track" an insurance check.
Avoid Potentially Price-Gouging Contractors
You'll likely have to hire contractors,so do so in an orderly (as possible) manner. "Once you get your home damage appraised by your insurance adjuster and find out how much your insurance will pay for your repairs, take time to vet out and hire contractors," Ulin says. "Get referrals and references while looking up each contractor's licenses and information online."
Also, make sure to take your time signing any contracts, avoid paying large "upfront" costs, and beware of door-to-door solicitations, adds Bill McGuire, regional director of the Better Business Bureau.
Watch out for Fraudsters
Sensitive data can easily fall into the wrong hands, and in the event of a disaster it can be difficult to control who may be able to access your personal financial files or data, warns Paul Evans, chief executive officer at Redstor Ltd, a data management software company.
"If an individual or an organization has been effected by a disaster they should reconcile what data they have lost and try to understand how they could be targeted," Evans says. "Furthermore, look out for any unusual activity on associated accounts, contact your bank and ensure all passwords are secure. Encryption can also be a powerful tool and anything that can be easily stolen, with data on it, should be encrypted."
Dealing with a natural disaster like Hurricane Harvey is tough enough on myriad fronts. That's why it's so important to protect your financial assets at a critical time.That will stabilize your personal situation, and allow you to better care for your family and neighbors—who'll undoubtedly appreciate the help.
Editorial Disclaimer: Opinions expressed here are author's alone, not those of any bank, credit card issuer, or other company, and have not been reviewed, approved or otherwise endorsed by any of these entities. All information, including rates and fees, are accurate as of the date of publication.