Money Advice For Evacuees
People who have loved ones or know someone who is suddenly displaced by Hurricane Katrina, or any natural disaster, should know there are some things to consider when seeking resources for temporary food, shelter and living expenses.
Financial adviser and The Early Show contributor Ray Martin has several suggestions.
Stay Safe, Plan for an Extended Stay Away:
The first thing to consider is to stay safe. Do not travel back to the affected areas to attempt to recover your property. Remember, the loss of personal property is not worth the risk of possible injury or loss of life. Find temporary shelter at a relief station or a hotel, and travel out of the affected area. Plan on the very likely reality that you will not be returning to the affected area for several weeks or months.
Homeowners Insurance:
If you own a home, you probably have homeowners insurance. If you are a renter, you may have renters insurance. People with these insurance policies should know that most of these private insurance policies provide coverage and benefits for temporary and emergency living expenses. Call your insurance company and explain your situation to claims specialists. They will inform you about the coverage you have for loss of use and temporary living expenses, how to make a claim, and how to get money quickly. Most insurance companies pride themselves on claims services and will provide immediate funds, typically in the form of a claim card, which is a debit card with a preset spending limit. This card can be used to buy water, gas, food, room/board at a hotel, etc., at any retail location where major debit/credit cards are accepted. Also, ask what costs are covered: Most private insurance will pay for the difference between what it would have cost you to live in your house/apartment versus what it will cost you to live in a hotel.Government Aid:
The Federal Emergency Management Agency, or FEMA, coordinates and operates recovery and relief activities in areas officially declared as disaster areas. FEMA also operates the Individuals and Households Program, which can provide money to affected and displaced individuals for temporary housing, home repairs and replacement, auto repairs, and moving and storage. This is the best source of resources for individuals without insurance. To learn more about the Individuals and Households Program, log onto the FEMA Web site and read the publication, "Help After a Disaster." It includes information for individuals to help determine if they are eligible for relief, and how to register for grants.
People in federally declared disaster areas can apply for relief under this program by calling the FEMA hotline at 800 621 FEMA (3362). Also, FEMA typically sets up processing centers in disaster areas to accept and process applications.
Employer Provided Wage Continuation:
Some employers have announced that they will continue to pay wages for their employees for up to 90 days. This is typically provided for by the employer's business continuation insurance or as a matter of company policy. Individuals in affected areas should contact their employer and inquire as to the availability of any wage continuation benefits. If wage continuation benefits are available, individuals will need to make arrangements for automatic deposit into an account of a financial institution that is accessible in their re-location area.
Retirement Plan Withdrawals:
If you have renters or homeowners insurance with loss of use and emergency living benefits, you should use these benefits as a primary source of emergency cash, rather than taking a withdrawal or loan from any retirement accounts. There are two important reasons for this: Withdrawals from retirement accounts are generally includable as taxable income, and retirement account assets are generally exempt from creditors claims.
Practical Considerations for Getting Cash
It is important to ask if the individual has a bank account and if their financial institution provides access in their relocation area. It is also important to consider that paper checks cannot be delivered to the disaster area. Paper checks presented with an out of town drivers license may also not be accepted by vendors or financial institutions where the individual is relocated. For these reasons, it may be necessary to open an account with a financial institution in the relocation area. It's also important to provide your bank account information to your employer and insurance company, so they can automatically deposit all payments from insurance and paychecks into the account.