5 ways to financially prepare for and navigate a natural disaster

Natural disasters like wildfires, hurricanes, and tornadoes have the potential to destroy homes and upend lives. Losing everything to a natural disaster can be enormously challenging, both emotionally and financially, but there are ways you can prep now to help make the recovery process a lot smoother if you face a natural disaster. Preparing for a disaster isn’t just about stocking up on food, water, and flashlights. Your plan should also take into consideration your finances. Here are steps you can take now to be more financially prepared should a disaster strike your area.

1. Gather important documents and keep them somewhere safe 

The Federal Emergency Management Agency (FEMA) recommends making sure you have birth and marriage certificates, social security cards, military service records, and your pet’s ID tags, microchip, and vaccination records. For financial documents, it’s recommended that you have your checking, savings, and retirement account numbers, insurance policies, wills, tax statements, credit/debit card information, housing payments, utility bills, and paystubs. It's also a good idea to have your health insurance card and copies of prescriptions.¹

Once you've organized these important documents, make sure they’re stored in a safe place. Use fireproof and waterproof safes for storing the original copies. If you’re storing any documents online, use a secure, password-protected cloud service.²

2. Inventory your belongings

Take photos or videos of your home and its contents. Include items in closets, basements, attics, and storage spaces. It’s also a good idea to take photos of your important documents mentioned above. And again, store all these photos and videos securely in password-protected cloud storage. Doing this will help with an insurance claim if your house and belongings don’t make it through the natural disaster.

3. Review your insurance policies

Your homeowners or renters insurance may cover certain types of disaster-related damage, but it might not cover everything. Michael McSweeney, a Guardian Financial Professional with Ascend Wealth Partners says you should, “verify that your policy includes coverage for disasters that are common in your area, such as flood, wildfire, or earthquake. Ensure you have a full replacement clause that’s adjusted to account for inflation and increased building costs.” It’s also a good idea to confirm that your homeowners or renters insurance includes adequate replacement value for your property and belongings.³ Some policies have what’s called “replacement cost,” which means they will cover the cost to rebuild or replace your home. Other polices cover “actual cash value,” which means they will only cover the current value of the home.⁴

4. Build an emergency fund

This fund can be tapped if you're forced to evacuate and need to spend time in a hotel or other temporary living arrangement. Aim to have at least three to six months’ worth of expenses in a liquid savings account.⁵

5. Get cash

When floods from Hurricane Helene devastated Asheville, North Carolina, in 2024, local businesses went cash-only, forcing people to wait in line at ATMs for hours.⁶ And there’s no guarantee that ATMs will even be functioning during a disaster. The destruction caused by the January 2025 Los Angeles wildfires included bank branches and ATM machines.⁷ FEMA recommends safely storing enough cash to cover the basic needs of your family in the event of a natural disaster. Think about what you’ll need for gas, food, and medications.⁸

Taking these steps ahead of time can help save you money and stress if the unthinkable happens. But unfortunately, the work won’t stop there. In the aftermath of a disaster, there will be more things to consider. Here are some tips to help you navigate your finances as you pick up the pieces.

1. Contact credit card companies and lenders

Ask about payment options to avoid late penalties, interest charges, and damages to your credit. In the wake of the 2025 Los Angeles wildfires, many banks and credit cards offered relief in the form of 90-day forbearance on mortgage payments and no reporting of delayed payments to credit bureaus.⁹

2. Find out if you qualify for disaster relief

Log on to DisasterAssistance.gov to find out if you qualify. You can also visit a disaster recovery center in your community or dial 211 for a referral for community-based resources.¹⁰

3. Research tax breaks you might qualify for based on your situation

If you’ve lost your home or business you may qualify to have your property reassessed so that the taxable value is only based on the land, not any structures. This can significantly reduce your property taxes. After the Los Angeles wildfires, people who had at least $10,000 in damage to their home or business were able to apply for this property tax relief. They were also able to postpone filing their property taxes without penalty.¹¹

4. Turn off utilities

This move can help you save on expenses if you’re unable to live in your home. Why pay for utilities that you aren’t using?¹²

5. Be cautious of scams

McSweeney says, “unfortunately scams are prevalent following disasters as opportunists target vulnerable individuals.” He advises clients to verify the legitimacy of individuals or companies you deal with before providing payments or personal information and be wary of contractors or vendors demanding immediate payment or offering deals that seem too good to be true. McSweeney adds that people should avoid paying in full upfront for repairs and instead opt for incremental payments as work progresses. And keep an eye on your bank and credit card statements so you can quickly detect unauthorized transactions.

Recovery from natural disasters can take years, but incorporating financial preparedness into your disaster plans may help you handle the impact with more resilience.