Spend Disaster Recovery Money Wisely

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Release date: 
May 8, 2009
Release Number: 
1830-036

MOORHEAD, Minn. -- The Red River of the North is down but the flood damages are starting to add up. More trouble could be in store for those folks who do not spend their flood-related disaster assistance payments wisely.  Those payments come with sound advice from state and federal emergency officials: be careful with that money.

The payment from the Federal Emergency Management Agency's (FEMA) Disaster Housing Program, whether by check or direct deposit, should be used to make repairs on a damaged home or to pay for rental assistance. Avoid the temptation to pay household bills or make purchases for unrelated needs.

The payment will be followed in a day or two by a letter explaining what the money is intended for.  It is important that the payment be used only for the intended purpose. "Experience tells disaster managers that this is the time when people are vulnerable," said FEMA's Federal Coordinating Officer, Michael H. Smith. "When dealing with thousands of dollars, caution is required."

From experience elsewhere, officials from FEMA offer the following tips to help Minnesotans in Clay, Norman, Traverse and Wilkin counties get the most out of their personal disaster recovery payment:

  • If a check is received, deposit it as soon as possible.
  • Don't cash and carry large sums of money or deal with strangers offering check-cashing or deposit services.
  • Don't be tempted to pay household bills, make unrelated purchases or use the funds for travel.
  • Select a repair company with caution and use recovery funds only to make the home habitable.  This includes fixing windows, doors, plumbing, ventilation, electrical systems and minor structural damage.
  • Don't contract for repair with a company without a recommendation and without a written statement of work to be completed. And don't pay the repair person up front.

These funds are intended to meet basic disaster-related needs and to help you regain a normal life.  If the applicant spends the money on anything other than the purpose for which the payment is intended, no future additional assistance may be granted.

If you have insurance, any FEMA assistance that pays for items covered by the insurance should be considered an advance and must be repaid.  However, you may qualify for FEMA assistance to supplement the insurance settlement. Special tax law provisions may help victims recover financially also.  Visit www.irs.gov or call IRS at 800-829-1040.

Federal grant recipients are urged to keep their disaster spending receipts and stay in touch with FEMA if their address or contact phone number changes.

For more information call 800-621-FEMA (3362), from 6 a.m. to midnight seven days a week until further notice or (TTY) 1-800-462-7585) or visit www.DisasterAssistance.gov.

FEMA leads and supports the nation in a risk-based, comprehensive emergency management system of preparedness, protection, response, recovery, and mitigation, to reduce the loss of life and property and protect the nation from all hazards including natural disasters, acts of terrorism, and other man-made disasters.

Last Updated: 
July 16, 2012 - 18:46
State/Tribal Government or Region: 
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