What to Do Before, After Your Insurer Pays Off for a Natural Disaster

NEW YORK (TheStreet) -- Many lives were affected when Hurricane Sandy hit the Eastern Seaboard. Damage has been estimated at $30 billion to $50 billion as homes were destroyed and lives changed forever.

When disaster strikes, it can be hard to see the light at the end of the tunnel, but for many, it is time to rebuild. There can be benefits to starting over.

If your house is hurt by a natural disaster such as Sandy, it is important to get the ball rolling and put your life back on track. Disaster relief from the government can be short-lived and government loans and financial assistance come with a lot of bureaucracy and red tape.

Getting things done as soon as possible is also beneficial to the communities that have been affected.

Before your claim is settled

Insurance claims can take time to process, especially in cases where large populations and entire communities are affected, and some things just can't wait (especially circumstances that involve water damage, which can lead to mold that can be difficult and costly to fix and cause health concerns). Chances are you will have to tackle some repairs before your claim comes through.

Check with your insurance company before you start repairs to make sure they have properly documented the damage -- then get started.

When it comes to scheduling home repair in anticipation of a claim, it is important to prioritize. Leaky roofs should come ahead of cosmetic fixes, as well as areas that may cause further damage while you wait.

For most home repairs, a credit card can and should be used, since it helps track the expense of rebuilding.

After your claim is settled

It is important to consider how you will allocate the funds from an insurance claim now to make the most of it in the future.

When you actually get your settlement, you should repay what you spent in anticipation of the claim and use anything left over to wipe out as much debt as possible. One of the best investments in your future can be to pay down outstanding debt.

Think of it as refinancing your life. If you had the opportunity to save money, you would take it, right? Well, a good credit score can save you money in many ways. You can save money on credit card interest rates, and lenders may offer better interest rates on mortgages or loans.

Did you know an increased credit score can also save you money on insurance? Most insurers will take your credit score into account when giving you quote.

Michael Germanovsky is an expert in personal finance with in-depth knowledge of credit cards, charge cards, and pre-paid cards. He began his writing career at the Novoye Russkoye Slovo, a partner of the New York Times International Weekly; and later authored a personal finance column at The Epoch Times. In 2011, Germanovsky created the Student Credit Card Education Initiative, designed to promote financial literacy and smart credit card use by young people. He is editor-in-chief at Credit-Land.com.