The Often Overlooked Side of Natural Disaster

Tips to Help Calif. Victims Recover from Financial Loss

Date: August 11, 2008

Contact: Paul Golden 303-224-3514, [email protected]

GREENWOOD VILLAGE, COLORADO—As fires inch closer to homes in the Los Angeles Basin, residents are packing their important belongings and escaping the path of destruction. While many are doing their best to protect their homes now, some will face the daunting task of recovering financially from this disaster later. The California wildfires remind us that life can change in an instant. Our daily routines are disrupted, property is destroyed and lives might be lost.

“Disasters obviously take an emotional toll, causing shock, grief and confusion. And the sudden shock to your financial system can be severe,” says Ted Beck, president and CEO of the National Endowment for Financial Education (NEFE). “But the number one priority is your safety and the safety of your family.”

NEFE offers these tips to financial issues that disaster victims must address immediately.

Housing and Property

If you are being asked to evacuate the area and authorities allow you to enter your home, be sure to collect your important financial documents along with your valuables. You will need them to file insurance claims, pay bills and take care of family members. Important documents include, but are not limited to: legal certificates, wills, powers of attorney, insurance policies, Social Security cards, your checkbook and bank account information, among others.

“During the Oakland fire in 1991, my family was in this very situation,” recalls Beck. “It was one of the worst fires in California’s history and we were forced to evacuate as the fire closed in on our home. My wife and I and our four children had only enough time to collect our paperwork, valuables and a change of clothes. It is impossible to escape the feeling that you are leaving something important behind.”

Once away from the area, contact your insurance company to notify it of your situation. Ask if your provider will pay for temporary living expenses if you are forced away from your home. If this provision is not included with your insurance policy, contact the Red Cross for crisis shelter locations and information.

Money and Cash Flow

Do you have enough cash on hand for emergency needs should banks and ATMs also be affected by the disaster? If not, contact the Red Cross or the Federal Emergency Management Agency (FEMA). One of these organizations might be able to guide you to sources of emergency cash assistance. You also might contact your employer and request an advance on your next paycheck.

This is a good time to contact your creditors to explain your situation. As always, paying your bills on time protects your credit rating. But, considering the circumstance, your creditors might be willing to work with you on a delayed payment schedule if necessary. Be sure to prioritize your bills, keeping in mind that insurance policies and mortgage or rent payments are the top priority. You also might consider stopping some bills immediately. For example, you can contact your utility, telephone, and cable providers to halt services on the property you have vacated. Before cancelling the service though, make sure you ask about termination and reconnection charges.


If you foresee missing time away from work, be sure to contact your employer immediately. If you or a family member is injured, you need to begin the process of applying for any available employee-sponsored disability benefits. You also may be able to take advantage of the Family and Medical Leave Act if you are unable to return to work in the near future because you are caring for an injured family member. This law applies to companies with more than 50 employees. Learn more by visiting the U.S. Department of Labor’s Web site at or by calling 866-487-9243.

“Once you know your family is safe, action in these areas is critical to shorten the duration of the financial disruption,” says Beck.

When the disaster subsides, there will be time to regain control of your routine, your financial security, and your life. But the process will take time. For more on what steps to take in the coming weeks and months, visit Disaster Recovery: A Guide to Financial Issues for information and resources on getting reestablished. NEFE has partnered with the Red Cross and the American Institute of Certified Public Accountants (AICPA) to produce this booklet. And for more tips on financially preparing for and recovering from a disaster, visit

Click to Download: Disaster Recovery Guide AICPA Red Cross.pdf (18.7m)



  • Paul Golden

    Media Relations Director

    Direct: 303-224-3514
    Cell: 303-918-3620
    [email protected]