How to recover financially after a natural disaster

Hawaiians are still reeling from the deadliest U.S. fire in over a century. The extent of the losses in life and property in Maui are still unknown.

Early estimates from the Pacific Disaster Center and the Federal Emergency Management Agency report that more than 2,200 structures have been damaged or destroyed, 86% of which were residential. The cost to rebuild could be around $5.5 billion. 

The economic loss of the Maui fires could total as much as $10 billion, according to AccuWeather.

As residents start to pick up the pieces, many of them may be wondering what crucial steps they need to take to recover financially. 

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“You have to go back to Hurricane Iniki in 1992 to find a natural disaster that hit Hawaii that caused anything close to this in terms of insured losses,” said Michael Barry, chief communications officer for the Insurance Information Institute. “This is epic.” 

After ensuring loved ones are safe, many victims of these wildfires may not be sure where to turn to start to rebuild their financial lives.

Here are two actions experts say consumers ought to take after a natural disaster: 

• Contact your insurer and file a claim: First, reach out to your homeowners or renters insurance company to start the claim process. Also, contact your auto insurer and, if you own a small business, your business property insurance company. Take photos of the damage to submit along with your claims.

• File a FEMA claim: Contact FEMA on its app or online at DisasterAssistance.gov to apply for federal assistance as well. The faster you can file a claim, the better, to help expedite obtaining and getting coverage for temporary housing, experts say. Also, make sure to keep all hotel and meal receipts.

If you’re concerned that you live in an area that is prone to wildfires — or you just want to be extra cautious and protect yourself financially against a natural disaster — insurance experts say it’s also important to take these steps:

• Review insurance coverage annually: Standard homeowners insurance policies generally cover fire and smoke damage, Barry said, but it’s always a good idea to double-check exactly what your policy says. Take a look at your policy once a year to make sure you have enough coverage. Also, be aware of your deductible and make sure you have adequate savings to cover that amount. Do the same with renters, auto, boat and business property insurance policies, too.

• Make a home inventory: Having an accurate inventory of all the items in your home makes it easier to document and be fairly reimbursed for any losses. Log your possessions by walking through and taking videos of all items with your camera phone. Some experts recommend a thought experiment: pretending you could turn your house upside down and then writing down a list of everything that could possibly fall out, to have an accurate list of the contents.

• Keep key documents off-site: Finally, keep your home inventory and other important documents, such as your insurance policies, in a fireproof box or off-site.

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