How to prep your finances for a natural disaster
Natural disasters like wildfires, hurricanes, and tornadoes have the potential to destroy homes and upend lives. Losing everything to a natural disaster can be enormously challenging, both emotionally and financially, but there are ways you can prep now to help make the recovery process a lot smoother if you face a natural disaster. Preparing for a disaster isn’t just about stocking up on food, water, and flashlights. Your plan should also take into consideration your finances. Here are steps you can take now to be more financially prepared should a disaster strike your area.
1. Gather important documents and keep them somewhere safe
The Federal Emergency Management Agency (FEMA) recommends making sure you have birth and marriage certificates, social security cards, military service records, and your pet’s ID tags, microchip, and vaccination records. For financial documents, it’s recommended that you have your checking, savings, and retirement account numbers, insurance policies, wills, tax statements, credit/debit card information, housing payments, utility bills, and paystubs. It's also a good idea to have your health insurance card and copies of prescriptions.1
Once you've organized these important documents, make sure they’re stored in a safe place. Use fireproof and waterproof safes for storing the original copies. If you’re storing any documents online, use a secure, password-protected cloud service.2
2. Inventory your belongings
Take photos or videos of your home and its contents. Include items in closets, basements, attics, and storage spaces. It’s also a good idea to take photos of your important documents mentioned above. And again, store all these photos and videos securely in password-protected cloud storage. Doing this will help with an insurance claim if your house and belongings don’t make it through the natural disaster.
3. Review your insurance policies
Your homeowners or renters insurance may cover some types of disaster-related damage, but it might not cover everything. It's a good idea to verify that your policy includes coverage for disasters that are common in your area, such as floods, wildfires, or earthquakes. And ensure you have a full replacement clause that’s adjusted to account for inflation and increased building costs. You’ll also want to confirm that your homeowners or renters includes adequate replacement value for your property and belongings.3 Some policies have what’s called “replacement cost,” which means they'll cover the cost to rebuild or replace your home. Other polices cover “actual cash value,” which means they'll only cover the current value of the home.4
4. Build an emergency fund
This fund can be tapped if you're forced to evacuate and need to spend time in a hotel or other temporary living arrangement. Aim to have at least three to six months’ worth of expenses in a liquid savings account.5
5. Get cash
When floods from Hurricane Helene devastated Asheville, North Carolina in 2024, local businesses went cash-only, forcing people to wait in line at ATMs for hours.6 And there’s no guarantee that ATMs will even be functioning during a disaster. The destruction caused by the January 2025 Los Angeles wildfires included bank branches and ATM machines.7 FEMA recommends safely storing enough cash to cover the basic needs of your family in the event of a natural disaster. Think about what you’ll need for gas, food, and medications.8
Taking these steps ahead of time can help save you money and stress if the unthinkable happens. But unfortunately, the work won’t stop there. In the aftermath of a disaster, there will be more things to consider. Here are some tips to help you navigate your finances as you pick up the pieces.
1. Contact credit card companies and lenders
Ask about payment options to avoid late penalties, interest charges, and damages to your credit. In the wake of the 2025 Los Angeles wildfires, many banks and credit cards offered relief in the form of 90-day forbearance on mortgage payments and no reporting of delayed payments to credit bureaus.9
2. Find out if you qualify for disaster relief
Log on to DisasterAssistance.gov to find out if you qualify. You can also visit a disaster recovery center in your community or dial 211 for a referral for community-based resources.10
3. Research tax breaks you might qualify for based on your situation
If you’ve lost your home or business you may qualify to have your property reassessed so that the taxable value is only based on the land, not any structures. This can significantly reduce your property taxes. After the Los Angeles wildfires, people who had at least $10,000 in damage to their home or business were able to apply for this property tax relief. They were also able to postpone filing their property taxes without penalty.11
4. Turn off utilities
This move can help you save on expenses if you’re unable to live in your home. Why pay for utilities that you aren’t using?12
5. Be cautious of scams
Unfortunately, scams are common following disasters. It’s important to verify the legitimacy of individuals or companies you deal with before providing payments or personal information and be wary of contractors or vendors demanding immediate payment or offering deals that seem too good to be true. You should also avoid paying in full upfront for repairs and instead opt for incremental payments as work progresses. And keep an eye on your bank and credit card statements so you can quickly detect unauthorized transactions.13
Recovery from natural disasters can take years, but incorporating financial preparedness into your disaster plans may help you handle the impact with more resilience.
Disclaimer:
2. Ibid
3. Information gathered from Michael McSweeney, a Guardian Elite Financial Professional, of Ascend Wealth Partners, January 14, 2025. Material discussed is meant for general informational purposes only and is not to be construed as tax, legal, or investment advice. Please note that individual situations can vary. Therefore, the information should be relied upon only when coordinated with individual professional advice.
4. Get prepared before a disaster or emergency strikes | Consumer Financial Protection Bureau
5. 10 tips to help homeowners prepare financially for a natural disaster | Fulton Bank
6. Helene floods in Asheville cause gas, water, cash shortages
7. Southern California banks gauge wildfire damage, prep rebuild plans | American Banker
10. Be Prepared for a Financial Emergency
11. How to get property tax relief if your house burned in the fires - Los Angeles Times
12. Be Prepared for a Financial Emergency
13. Information gathered from Michael McSweeney, a Guardian Elite Financial Professional, of Ascend Wealth Partners, January 14, 2025. Material discussed is meant for general informational purposes only and is not to be construed as tax, legal, or investment advice. Please note that individual situations can vary. Therefore, the information should be relied upon only when coordinated with individual professional advice.
Material discussed is meant for general informational purposes only and is not to be construed as tax, legal, medical, or financial advice. Guardian, its subsidiaries, agents and employees do not provide tax, legal, medical or finance advice. Consult your tax, legal, medical or finance professional regarding your individual situation. Links to external sites are provided for your convenience in locating related information and services. Guardian, its subsidiaries, agents and employees expressly disclaim any responsibility for and do not maintain, control, recommend, or endorse third-party sites, organizations, products, or services and make no representation as to the completeness, suitability, or quality thereof. Guardian® is a registered trademark of The Guardian Life Insurance Company of America, New York, NY. Copyright© 2025 The Guardian Life Insurance Company of America. All rights reserved.
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