Released September 5, 2008
MARION, Ark. - After the high winds and water of a catastrophic storm are gone, homeowners are often at a loss to know what to do to when it comes to taxes and insurance.
"Managing financial losses after a natural disaster - flooding, earthquake, tornado or other windstorms - is difficult," said VeEtta Simmons, Crittenden County extension staff chair for the University of Arkansas Division of Agriculture.
It's important to have key personal financial and insurance information secured before a storm in accessible and safe place. Those records will be of utmost importance after a storm strikes.
The insurance industry plays an important role after a catastrophe.
"Insurance representatives will be on the scene immediately following a major disaster to speed up the handling of claims," she said. "Notify your insurance representative of any losses. Be sure and leave a number or temporary address where you may be contacted."
Hardship cases are a first priority - with service promised to all policyholders as soon as possible.
"Don't assume your settlement will be the same as your neighbor's," Simmons said.
Some policy owners may find their insurance company will complete a follow-up visit to your home. The company wants to know if you used your claims check to complete your repairs.
Taxes are another issue that homeowners find confusing.
"Casualty write-offs from an earthquake or flood are equal to the amount of your losses not covered by insurance minus both a $100 deductible and 10 percent of your adjusted gross income," she said.
For example: if your adjusted gross income is $20,000 and your loss is $10,000, you could deduct a loss of $7,900 ($20,000 x 10 percent = $2,000 + $100 = $2,100; $10,000 - $2,100 = $7,900).
Finally, there's government assistance. Local officials may request state aid from the governor through the state Office of Emergency Services. The governor may also request a federal disaster declaration to secure federal money.
"Individuals and families must apply for available governmental disaster assistance programs to determine eligibility," Simmons said.
At the state level, Temporary Housing Assistance Grants may be available for one to three months for families whose homes were destroyed or uninhabitable after a disaster. Those with additional living expenses coverage from a homeowners' policy aren't eligible.
Individual and family grants to assist disaster victims with uninsured losses from a disaster are available. Grants can be used for medical expenses, limited home repair, repair/replacement of furniture, appliances, transportation, insurance deductibles and food.
If your damaged community receives a presidential disaster declaration, the federal Individual and Family Grant (IFG) Program may authorize funds for such needs as housing, personal property, medical/dental, funeral and transportation. Each application is reviewed to determine specific needs and eligibility.
For more information on post-disaster financial recovery, see http://www.uaex.edu/Other_Areas/publications/PDF/FSHEC-67.pdf or visit your county extension office.
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http://www.uaex.edu/news/september2008/0905disaster_financial_aftermath.htm
Contact: Lamar James, (501) 671-2187, ljames@uaex.edu
