Rebuilding After Disaster: What You Need to Know About Financial Assistance, Scams, and Home Insurance

Jan 14

The devastation caused by the LA fires serves as a reminder of how fragile, unpredictable, and frankly terrifying, life can be.

Candidly, I can’t begin to fathom what people affected by the LA fires are going through.

I can’t imagine what it’s like having everything you own burned to the ground, especially if you’re not in a financial position to recover.

I can’t imagine losing a loved one or pet in a fire.

My heart is with everyone impacted.

While I know a little about disaster preparedness—in large part because I own a small single-family rental in Tampa that has found itself in the path of multiple large hurricanes last year—I’ve learned so much more in the past few days from reading, researching, and hearing stories from those who’ve experienced the unthinkable.

Disasters force us to confront questions we’d rather not think about: What would I do if this happened to me? How would I rebuild? What resources are out there to help?

While no one wants to imagine being in this position, it’s critical to understand your options.

And hopefully, you never need them.

Financial Assistance: Where to Start

If disaster strikes, knowing where to turn can help us take some control of an impossible situation. Here are key resources to know about:

FEMA’s Individual and Households Program: Offers financial aid for home repairs, temporary housing, and disaster-related needs but it’s important to note that this assistance aims to covers things not covered by insurance. You should still file a claim with your home insurance as soon as possible after disaster strikes.
SBA Disaster Loans: These low-interest loans help homeowners, renters, and business owners cover repair costs and replace personal property.
Operation HOPE’s Financial Recovery Services: This nonprofit works with FEMA and the Red Cross to provide counseling, help survivors communicate with creditors, and assist with SBA loans. Learn more at operationhope.org.

Timing matters—many assistance programs have deadlines, and starting the process as soon as possible can help you get in virtual line and avoid delays.

Protecting Your Finances and Credit

Recovering financially after a disaster can feel overwhelming and unfortunately, scam artists love to take advantage of people in already horrible situations. Here are a few things to stay on top of to make sure you stay as financially okay as possible":

Communicate with Lenders Early

If you’re struggling to make payments, reach out to your credit card company, mortgage company, auto lender, or student loan servicer as soon as possible. Lenders are often more flexible when you proactively explain your situation.

When you contact your lender, here are some questions you can ask:

What options are available to help me temporarily reduce or suspend my payments?
Are there forbearance options?
Can you waive late fees?

The sooner you start communicating with these companies the more likely they are to work with you.

Additionally, the Heroes Act of 2003 provides specific relief for federal student loan borrowers during national emergencies. Loans may go into forbearance if you qualify. Be sure to proactive reach out to confirm your options.

Beware of Scams

Unfortunately, scammers often prey on disaster survivors. After Hurricane Katrina, fake contractors demanded upfront payments and then disappeared without completing repairs. Verify any contractor or organization offering help, and never share financial information without confirming their legitimacy. FEMA provides tips for avoiding scams as well.

Know Your Rights

Disasters often bring out price gouging and exploitation. In LA, some landlords have been raising rents dramatically, exploiting displaced families in need of housing. One example on Zillow, showed an almost overnight increase of 27% in rent.

Last Sunday, Governor Newsom signed an executive order that prohibits price gouging in times of emergency and remains in effect until January 7, 2026, for LA County. This means that landlords are permitted from increasing the cost of a rental property by more than 10%.

Monitor Your Credit

Check your credit report for errors or fraud regularly. You’re entitled to a free report annually from Experian, Equifax, and TransUnion at AnnualCreditReport.com. You could also consider freezing your credit if you’re not applying for anything in the near future.

The Home Insurance Crisis

The LA fires have also exposed a growing problem: homeowners are finding it harder to secure affordable insurance in high-risk areas. Both California and Florida have seen major insurers limit coverage, raise premiums, or outright refuse new policies.

For example:

California: State Farm and Allstate have stopped writing new homeowner policies in the state due to wildfire risks. Policies that remain in effect often exclude wildfire damage unless homeowners make costly mitigation improvements, like installing fire-resistant roofs.
Florida: My Tampa rental property premium doubled in one year, largely because my roof didn’t meet updated wind mitigation standards. I had to replace parts of the roof and provide documentation before my premium came down to a manageable level.

To protect yourself, be sure to review your insurance policies and check the following boxes:

Understand Your Coverage: Read your policy carefully. Does it cover wildfires, floods, or hurricanes? If not, consider supplemental coverage.
Ask About Exclusions: Many insurers are adding exclusions for natural disasters—don’t assume you’re covered.
Ask Your Insurance Company About Proactive Improvements: Roof replacements, storm shutters, and defensible space around your property can not only lower premiums but may also be required to maintain coverage. By adding hurricane clips to my roof in Tampa, I was able to to reduce my premium by almost 50%.

Final Thoughts

Recovering from a disaster is exhausting and painstaking. Frankly, I can’t even imagine the psychological and emotionally toll it could take.

Being prepared can help. With an increase in natural disasters over the last few years, I recommend reviewing your insurance policies regularly, educating yourself about financial assistance options, asking all the hard questions about your coverage, and in general just getting your finances in order as soon as possible.

If this information helps you or someone you know, please share it.

For those looking to make a difference, many families are in dire need of basic essentials like diapers, water, and food. If you feel compelled to make a donation here are 3 trusted charities to consider: