Protecting Your Family and Home After Disaster Strikes
By Remar Sutton, DCU StreetWise Spokesperson
Hurricane Isabel's recent windy and wet blast through a large swath of the U.S. has left thousands of homeowners coping with the sudden emergency of repairing their homes. I sympathize entirely because a storm this summer ripped off my roof, soaking everything but, I'm thankful, hurting no one. This de-roofing reminded me that often the biggest challenge in trouble's aftermath is to avoid being ripped off financially as you repair your home and restore your life.
Ill wind, rain and flood seem to blow in fly-by-night contractors and scam artists of all types, promising a quick fix but interested only in a quick buck. And they usually make their approach just as you're trying to sort out a hundred tasks. Whether you are coping with the aftermath of this summer's floods, fires, and hurricane or not, the following tips and information should be basic homework for all homeowners. And if you're thinking of helping out victims of recent disasters, check out the final section on avoiding phony charities.
First Steps After a Disaster
The American Red Cross and the Federal Emergency Management Agency (FEMA) recommend three important first steps to take after a disaster strikes your home or apartment.
- Make sure your house or apartment building is safe to enter. Then if the home is not inhabitable, remove any valuables to a safe place.
- Make temporary repairs to stabilize hazardous areas and prevent further damage. Take photos of all damage before you begin repairs and keep all receipts, because most insurance companies will reimburse you for these expenses.
- Call your insurance company to report the disaster and damage. Find out their policy about emergency repairs and ask if your coverage provides for temporary living expenses such as food and hotel room.
More information about these first steps and all the remaining steps you need to take to recover from a disaster is presented in a useful booklet, After Disaster Strikes, prepared by the American Red Cross, FEMA, and the National Endowment for Financial Education (NEFE). Insurance Claims and Recovering Financially
The first resource for recovery for most people is their homeowner's or renter's insurance. In addition, for natural disasters, governmental grants and loans make be available, and there are private loan sources.
- The first step in filing an insurance claim is to talk to your company, report the damage, and write down any steps they wish you to take. To assist the company in covering your real losses, make an inventory of the damage—take pictures, make a list of everything that is damaged (or lost), the amount of damage. (It's a good idea for all homeowners to prepare and keep an inventory of possessions and interior and exterior pictures of one's home to have should disaster strike—it'll fit on one CD you can take with you if you need to evacuate.) Then be prepared to work with your insurance company and claims adjuster. The Insurance Information Institute provides tips on preparing for and recovering from these disasters—earthquakes, fires, floods, hurricanes, and tornadoes.
- You may be eligible for federal disaster programs if your area has been declared a federal disaster area. Find out about this declaration and how to apply for assistance on the FEMA website.
- Be prepared to notify your employer if you can't get to work for a short time because of the disaster and creditors if there are lost bills.
- You may need to reassemble financial records if these have been lost. The booklet After Disaster Strikes has good tips on how to do this.
- Depending on the amount and type of damage to your property, you may qualify for a tax refund or deduction under the "casualty loss" deduction. The IRS has a section on Tax Relief in Disaster Situations including Topic 515 which gives an overview of tax relief for Presidentially-declared disaster areas.
Contracting for Home Repairs
Repairing your home after a natural disaster, such as a storm, earthquake, or fire, can be filled with danger because so many people need repairs at the same time. Established, reputable contracting companies are quickly booked solid. This situation attracts both legitimate contractors from other areas and the scam artists. How do you tell the difference? FEMA, the FTC and other experts offer some key tips.
- Use only licensed and insured contractors, builders, and roofers. Ask for recommendations from friends, family, neighbors, or your insurance agency. Ask for references on previous jobs—and call these customers.
- Check for complaints against the contractor with local Better Business Bureau and Home Builders Association
- Be extremely wary of any persons offering services door-to-door. Many scam "builders" use this approach. They may also use scare tactics about "dangerous conditions" if you don't start immediate repairs, ask for all or most of the money up front, and/or urge you to make extensive repairs right away.
- Don't rush into repairs. Take your time planning and checking out contractors. Get several bids—make sure that the contractors are bidding on the same set of specifications.
- Always get a signed contract that contains specific details of what is to be done. As the Better Business Bureau points out a contract that simply says "repair siding." is "an open invitation for abuse." In this example, the contract should include at least the location of the repairs, approximate square footage, type of repair materials and siding to be used, and extent of preparatory work.
- Report suspected builder fraud to the consumer division of your state attorney general, and file a complaint with the Better Business Bureau.
Read more:
Checking Out Post-Disaster Charity Appeals
After a disaster many people want to help in any way they can. Unfortunately, the con artists are just waiting for their chance to take advantage of our open hearts and wallets. You can ensure that your gift goes where you want to go by following these tips.
- You choose the charity—don't respond to unsolicited calls or emails. Even if the call appears to be from a legitimate charity, call back on your own using the number of the charity from an information directory or go directly to the charity's website. Do not click on a link or address given in an email—this is a favorite tactic of scam artists who "spoof" the address of a legitimate charity or company but take you to a fake website and steal your money and even your personal information.
- Give a check or money order made out to the charitable organization. Don't give cash. Don't make out a check in the name of the individual collecting to money.
- Watch out for appeals to emotion and pressure to give "right now." Legitimate charities will give you time to think and to check them out.
- Check out the charity with your local Better Business Bureau or, if it's a national charity, at www.give.org, the website of the BBB Wise Giving Alliance.
Read more tips from the Better Business Bureau.
Whether you are working hard to recover from damage to your home or working to "be prepared," as the Boy Scouts remind us, I hope these tips help.
So, what do you think?
If you find this review helpful, please pass the word to your friends. Also email me* with any comments or suggestions. Remar Sutton
Prepared by Remar Sutton and Associates for DCU, October 2003. All rights reserved.
* Please note that ordinary email is not secure. You should avoid including any sensitive personal or financial information. Contact DCU directly with specific questions concerning your account or membership.
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