Preparing your finances

Natural disasters such as a flood, severe storm, or fire can happen at any time. These disasters cause damage to homes and property and create financial challenges. We often prepare for a natural disaster by securing drinkable water, canned goods, batteries, and flashlights. Preparing finances and documents for a natural disaster is also necessary. Here are some things to help when preparing for, and dealing with, the financial impact of natural disasters.

Safeguard important documents

Safekeeping these documents are vital when dealing with an emergency:

  • Originals and copies of your identification include a driver’s license, passport, Social Security card, and birth certificate. These are helpful if you have to prove your identity. It is best to have originals, but copies are also beneficial if they are lost or destroyed.
  • Contact information (including phone numbers and websites) for What to Do When Facing a Natural Disaster your banks, brokerage firms, and insurance companies.
  • Copies of your financial information such as credit and debit cards (front and back) and checks (front). During a disaster, you may need your account information from these documents to authorize payments.
  • Current insurance policy information for homeowner/renter, auto, and life insurance coverages.
  • Originals and copies of medical information, such as insurance cards and health records.
  • An inventory of valuable personal property. Document the value of the items by keeping receipts and written appraisals, and perhaps photos.

Ways to store your information

Emergency evacuation bag: Along with personal safety items in your bag, you should include copies of some essential documents listed earlier. Large amounts of cash should always be kept in your FDIC-insured bank account. However, you should have a small amount of money to purchase food or supplies if ATMs and credit cards are not working. Make sure to keep your evacuation bag in a secure and accessible place for a quick exit.

Digital storage: Most documents can be stored electronically. When deciding which records to keep digitally, consider accessing the documents using your smartphone or a computer. Encrypt sensitive documents and set your electronic device security to require a password, thumbprint, or facial recognition for additional safety.

Safe-deposit box at your bank: This may be an appropriate location for difficult or impossible documents to replace and that you do not need to access frequently. Since most safe deposit boxes are not waterproof, you might also seal these items in waterproof bags or containers to prevent flood or other water damage.

Bank availability during a natural disaster

Banks may need to temporarily limit operations because of the natural disaster’s impact on the bank’s physical location. They may have to close the lobby, converting to drive-thru-only services, or encouraging customers to use ATMs or digital channels to access their services. Consider your digital banking options by reading FDIC Consumer News Banking with Apps article. Regardless of the operating conditions, all FDIC-insured banks or savings institutions will continue to provide insurance for up to at least $250,000 in the unlikely event of a bank failure. Please see additional information regarding FDIC deposit insurance.

How to handle property damage

Report property damage to your insurance company or agent as soon as you can. Don’t throw away damaged goods or make significant repairs until a claims adjuster visits your residence. Also, keep receipts for emergency repairs and take photos of the damages, if you can. Federal assistance with natural disasters is available from the Federal Emergency Management Agency (FEMA). FEMA provides different loans for homeowners, small business owners, or farmers to repair or replace damaged property.

Financial difficulty

If you do not think you can make your loan payments on time due to a natural disaster, immediately contact your lender. Paying your debts late or not at all can result in penalties, interest charges, and damage to your credit score. It is essential to contact your lender as soon as possible to explain your situation. Your lender should be able to work with you on a solution.

Beware of scams during a natural disaster

Dealing with a natural disaster is difficult enough. Fraudsters make matters even worse. They try to take advantage of these situations to steal money and valuable information. If you are a disaster victim, be careful about accepting unsolicited offers to make repairs or assistance. It is crucial to avoid requests that pressure you to act quickly.

Sometimes fraudsters pretend to be representing a charitable organization, so be sure to only deal with charities you are familiar with or have researched thoroughly. Some fraudsters attempt to use the name of a reputable charity and then try to direct you to a fake website to steal money and financial information. Do not release your personal or financial information unless you are sure the lender, entity, or person you are dealing with is legitimate.

It is essential to be prepared to survive the impact of a natural disaster. These steps can help ease the challenge of restoring or replacing your property after a catastrophic event.


Larry Marvin

LifeCrafter Money $ense

Sources and Additional Resources

Emergency First Aid Kit (EFAK)

FDIC Consumer News: Prepare Your Finances to Weather the Storm

FDIC: What to Do When Facing a Natural Disaster.

For more help or information, go to or call the FDIC toll-free at 1-877-ASK-FDIC (1-877-275-3342). Also, contact Consumer Affairs online at