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Since a disaster or emergency can happen at any time, it’s important to be ready for anything. To increase the chances that you’ll be resilient in the face of a disaster, do and learn what you can now to improve your disaster financial readiness.
What is disaster financial readiness?
“Disaster financial readiness” means taking steps to ensure your finances and important information are in order so you can respond and recover when a disaster strikes. This also includes knowing how to get financial help after an event occurs. Disaster financial readiness should be part of your overall financial wellness plan.
The best ways to prepare for unexpected expenses that may result due to a disaster or emergency are to:
- understand your contracts and obligations,
- collect and maintain access to important documentation, and
- know how to cover costs.
Read your contracts
You may not know it, but most people have at least one contract with someone else. For example, if you have a cell phone plan, you may have a contract with a cell phone service provider. Other examples of contracts could be housing (rent/mortgages), auto loan agreements and insurance coverage, healthcare coverage, employment contracts, etc.
Getting relief
When you enter into a contract, both you and the other party agree to fulfill certain obligations. It’s important to be aware of your financial obligations and the terms of your contracts so you understand your options if there’s a disaster. Sometimes the terms of your contract can provide some relief in situations where property is damaged or unusable because of the impact of a disaster. Relief may also be available if a disaster causes financial hardship.
Not fulfilling your obligations
Another reason to understand your contracts is so you know what, if anything, would allow you to not fulfill your obligations. For example, you may not have to meet the terms of a contract if there’s been a disaster, emergency, hazard, or “act of god” (a term used in contracts that means nothing could have been done to prevent the damage caused by a disaster).
The contract will define the necessary steps to take and a timeline in which actions must be taken.
Documentation
Being financially ready for a disaster also means taking steps to ensure you can still access certain things no matter where you are. You could need important documents, proof of your property, and access to banking information.
Documents
Make sure you have important documents collected in one place so you can still access them if you have to evacuate and/or if your home is not livable. You can have hard copies of the documents in a folder, you can store them digitally, or you can take pictures of them. Examples of documents include:
- Driver’s licenses, passports, identification cards, birth certificates and adoption papers
- Social Security cards
- Medical information, including immunization records
- Power of attorney papers, guardianship and Supported Decision-Making Agreements
- Banking information
- Insurance policies and professional appraisals
- Deeds and ownership forms
- Marriage certificate, prenuptial agreements, child support and alimony documents
- Living will and last will and testament
Assets
Take pictures and/or videos of any real and personal property and things you own so you have a record of what you own and the condition everything is in. If your home is impacted by a disaster and your items are damaged or gone, you’ll have proof of what you had in case you need to make a claim or receive supplemental disaster assistance.
Digital accounts
If you have digital accounts that could be helpful during a disaster, make sure you have your usernames and passwords documented and ready to go.
In the event you are displaced, ensure you have alternative ways to receive income and benefits. For example, having an online bank account could be helpful. If aid is provided via check, you can do a remote deposit. Also, with online banking, you may be able to have funds deposited directly into your account. With this option, you may be able to access funds faster.
Covering costs
Since most disasters are unexpected, they can also create unexpected expenses. Sometimes you can get help for those costs, but you may have to cover some expenses yourself.
Cash on hand
If the power goes out during a disaster, ATMs and debit or credit card purchases may not be available. To be ready for situations like this, it’s a good idea to have some cash on hand so you can still buy things you need, like food or gas.
Save money
One thing you can do to prepare is save money so you can cover unexpected expenses that arise due to a disaster. A strategy you can use is to set up a separate savings account that is just for disasters and emergencies. The more you add to the savings account over time, the more money you’ll have available during a disaster.
Saving money may not be possible for some people. Thus, it is critical to understand the resources that might become available.
Get help
In addition to saving money, it can be helpful for you to be aware of – and understand – what potential resources could be available. If there’s a federally declared disaster, certain assistance programs might become available. If you have unmet needs or have experienced hardship, you may be eligible to get help through these programs.
Different government entities offer different supports depending on the type and severity of the event. Listed below are some of the government programs that may provide assistance. Knowing what resources could become available can help you be better prepared.
Federal programs
- FEMA – Individuals and Household Program
- Financial assistance available from various government agencies after a disaster
- Fannie Mae – Resources if Impacted by a Disaster
- Small Business Administration – Disaster Assistance
- USDA Disaster Assistance Programs
- Internal Revenue Service – Tax Relief in Disaster Situations
- U.S. Department of Labor – Disaster Recovery Assistance
State and local resources
- Texas Health and Human Services – Receiving Disaster Assistance
- Texas Department of Housing and Community Affairs – Disaster Relief Resources: Individuals and Families
- Texas Department of Agriculture – Disaster Assistance
- Texas Department of Insurance – Disasters: how to prepare and recover
- State Bar of Texas – Disaster Relief Resources
- Texas Attorney General – Disaster and Emergency Scams
- Texas General Land Office – Recovery Texas
Additional information
- Consumer Protection for People with Disabilities After a Disaster (Disability Rights Texas)
- How to Get Back on Track After a Weather Emergency (Federal Trade Commission)
- How to Organize Your Important Papers Before a Disaster Strikes (Federal Trade Commission)
Updated: April 19, 2024
Publication Code: DPR15
www.DRTx.org
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Disclaimer: Disability Rights Texas strives to update its materials on an annual basis, and this handout is based upon the law at the time it was written. The law changes frequently and is subject to various interpretations by different courts. Future changes in the law may make some information in this handout inaccurate.
The handout is not intended to and does not replace an attorney’s advice or assistance based on your particular situation.
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