Immediate financial needs
Recovery involves balancing immediate needs with future planning. Before diving into the details of the process, define goals across different timeframes:
- Short-term. Secure housing; alert family, friends, and business contacts; start the process to replace valuable documents; and manage immediate expenses.
- Mid-term. Determine a plan to repair or replace damaged property, stabilize income and expenses, and insurance coverage if appropriate.
- Long-term. Build savings, plan for potential relocation or lifestyle changes, home rebuilding considerations.
Professional Assistance
Do not go through it alone – consider who you need to connect with and what they can do for you:
- Banks – mortgage assistance, financial options and scenario planning, credit considerations, e-billing, loan repayment, wealth advising, updating your account contact information.
- Financial resilience coaches and case managers (often from nonprofits) – how to secure important documents lost to fire (birth certificate, social security, passports, deeds), immediate financial aid, utility bills, insurance company forms.
- Insurance Agents - coverage and policy, claims process, report damages, understand time limits, relocation or additional living expenses coverage, property limits, as well as whether the policy covers HOA fees during your displacement and what coverage you may have for day-to-day expenses.
- Independent Adjusters – represents the insured (not the insurer), negotiates with the insurance company, advocates for a fair settlement that reflects full scope of losses. Note: insurance company will assign its own adjuster.
- Real Estate Agents - leasing or buying decisions and understand best practices to avoid fraud.
- Attorneys – family, estate, trust legal options and how it will impact long-term estate planning.
- Wealth Advisors - understand cash reserves, investment accounts, asset allocation, portfolio risk, accessing margin borrowing against investments, or other borrowing options within your overall risk tolerance.
- County Assessor - to determine if you’re eligible for a reduction in your property taxes.
Financial decisions around housing
- To rebuild or not to rebuild and move – be as informed as possible before making significant choices:
- Mortgage – understanding repayment assistance options, including forbearance vs. deferment and loan modifications, (rebuilding costs vs. insurance payout gaps), process for releasing funds as a lienholder from claims paid through your insurance policy.
- Current financial situation – determine your budget for interim and long-term options. A financial planner can help create a pathway.
- Local, state, and federal assistance – review FEMA and insurance policy coverage options.
Budget and other considerations:
- Evaluate factors such as the cost of rebuilding, potential future risks in the area, and the timeline for completing repairs. Impact on children, mental wellness, and straight cost benefit analysis matter: Rebuild costs (economic, financial, time, opportunity).
- Calculate change of residence costs (moving expenses, cost of living, home values, school quality, job opportunities, environmental safety / climate risk, insurance coverage, community assets / resources / ecosystem), including any remaining mortgage loan obligations.
- Assess savings, emergency funds, and current expenses – how / if participants need to reprioritize spending or find financial assistance programs for financial.
Tips for Tax Season
We suggest you speak with an independent tax professional, CPA, or accountant to obtain the best guidance on your tax situation. Best practices include maintaining accurate documentation of damages, including photographs, receipts, and insurance claims. You will need to distinguish between deductible losses and non-deductible wear and tear, so keep detailed descriptions and supporting documents, such as photos or videos, to expedite the process AND keep detailed notes and records of all communications, including who you talked to when and what you discussed—and keep your receipts and paperwork organized and accessible.
Know your options:
- understanding tax relief options and implications tied to losses,
- return timing, deferrals, extensions,
- federal and state tax codes that allow for write-offs and benefits designed to help individuals recover from the impact of state and federally declared disasters,
Seek help if needed to calculate and claim casualty losses and get guidance from a tax advisor, CPA or accountant on how to access income tax return funds as soon as possible, without a requirement to wait until your tax year is complete.
Business support
Review assistance options being provided by the Small Business Administration for homeowners, renters, nonprofits, and businesses of all sizes affected by the fires. There is also a Small Business Disaster Relief Fund from the LA Chamber of Commerce.
Remember that there are resources and supportive services available to help you (and your business) during this time. We hope this helps you build financial resilience and confidence to get through financial challenges.
