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Thought Leader Uncategorized Financial Inclusion

Financial Uncertainty in the Face of a Natural Disaster

Operation HOPE

By Anita Ward, President Operation HOPE 

As I watch Louisiana brace for another hurricane, this one named Barry, I can’t help but reflect on financial stability and preparedness.  This month earthquakes rocked California, Washington, and Nevada, tornadoes pummeled the Mid-West, and the South experienced heavy flooding.  According to the U.S. National Oceanic and Atmospheric Administration the 2018 costs of natural disasters exceeded $90 billion, and 2019 is following suit.

Along with the physical devastation, natural disasters cause financial hardships that can linger for years.  While Americans at all income levels must rebuild economically after a disaster, underserved, marginalized communities experience the greatest impact.  Credit scores drop, debts rise, and recovery options are limited, resulting in even wider chasms of economic inequality. 

For those who are financially prepared, the impact is temporary, but for those who are not financially literate and prepared, the economic impact is catastrophic.  When disasters strike lower income individuals and communities of color, credit scores see a drop in 31 points while majority white communities only experience a 4 point drop under similar conditions.  The disastrous impacts affect individuals who are unable to pay bills and lose their transportation, jobs, housing, and access to capital over time. The ongoing financial wellbeing consequences of a disaster are not fully understood.  

Natural disasters level the homes of the rich and the poor and exacerbate existing financial and social issues.  While disasters are equalizing events that affect everyone, the economic recovery efforts can be polarizing forces.  Income and wealth are the basis of resilience and facilitate a rapid recovery. People with fewer resources are less likely to recover after a disaster.  

Recovery measures offered by local, state and federal programs, along with private contributions assists vulnerable populations when a disaster strikes, but financially uplifting these same individuals and preparing them for a natural disaster is critical to creating financially stable and sustainable communities.  Operation HOPE financial wellbeing coaches provide free financial counseling to everyone. In addition to improving the financial health of individuals and small businesses, these coaches are trained in disaster preparedness and recovery. HOPE provides nine HOPE Inside locations in Atlanta. They can be found at http://operationhope.org/map/#georgia

Georgia experiences all type of natural disasters – tropical storms, flooding, tornadoes, hail, wild fires, blizzards, and ice storms. Atlanta, and our sister cities Marietta, Woodstock, Newnan, and Rome, rank high among Georgia cities in terms of extreme weather. How can you prepare for a natural disaster?  

In an emergency having access to personal records is crucial.  Documentation is required for the recovery process, so preparing for that necessity is an immediate first step.  Collect and secure your financial, personal, household, and medical information. ATMs and credit cards may not work in the days following a disaster, so keep a small amount of cash at home in a safe place. You may need it to purchase food, or fuel, or supplies.  Review your home and renters insurance policies for the amount and extent of your coverage. Most homeowner policies do not cover flooding, but the National Flood Insurance Program offers policies that do. Operation HOPE and FEMA published the Emergency Financial First Aid Kit (EFFAK) to help prepare for a natural disaster.  The EFFAK also offers mobile apps where you can store your documents and contact information. Download the EFFAK here.  

The type of information and documents you need while recovering from a disaster includes:

Personal information

Personal identification

Birth certificate

Drivers license

Social security card (required for FEMA disaster assistance)

Military ID and service record

Medical records

Health insurance 

Immunization records for your children

List of medications

Don’t forget about your pets.  Secure a photo of their ID tags. 

Financial and legal documents

Bank information and contact

Mortgage information and records

Insurance policies and agent contact information

Job/payroll information to document your income source

Tax records  (required for FEMA disaster assistance)

Since a disaster can cause mail interruptions, switch your payroll and benefits, like Social Security, to direct deposit. 

Most importantly, prepare for a disaster through a financial wellbeing program.  Contact a HOPE Inside coach in your community. HOPE is America’s first line of response for financial recovery and is the only financial emergency preparedness and recovery service in the country. Through partnerships with the American Red Cross, FEMA, and industry leaders, our teams deploy in response to federal-declared disasters to serve as a financial advocate for local homeowners, renters, and small business owners.

Through the HOPE Crisis Hotline and HOPE Inside Disaster locations, financial wellbeing coaches help survivors mitigate credit issues, develop emergency budget counseling, communicate with creditors, obtain SBA loans, prevent foreclosure, and prepare for the future.

In addition to the EFFAK, HOPE offers the following resources to assist you with your disaster preparedness. Download them here.

Personal Disaster Preparedness Guide

Disaster Financial Recovery Score

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