Harvey is subsiding, but for the tens of thousands driven from their homes the financial toll is just beginning

AP/David J. Phillip

Officials estimate up to 40,000 homes were destroyed in the Houston area.

• Tens of thousands of Texans have been driven from their homes after dangerous flooding from Harvey.
• Officials estimate up to 40,000 homes in the Houston area could be destroyed.
• Less than 20% have flood insurance, leaving people to rely on FEMA to help replace belongings and rebuild their homes.

Since Hurricane Harvey made landfall in Texas last Friday, dangerous flooding has driven tens of thousands of people from their homes, leaving "unprecedented" rainfall and winds to wreak havoc.

Officials estimate that up to 40,000 homes in the Houston area - a city of more than two million people - have been destroyed.

The coastal areas of Rockport and Port Arkansas, which are close to where the storm made its first landfall, were heavily damaged, as were the nearby cities of Port Arthur and Beaumont.

Aerial photos of the aftermath in Houston show entire neighborhoods submerged in water.

But as Harvey begins to subside - the tropical storm made a second landfall in Western Louisiana on Wednesday with lower wind speeds of 40 mph - the financial toll on survivors is just beginning.

Over the coming days and weeks, tens of thousands of Texans who fled their homes for safety will return to devastating scenes. The recovery process - from salvaging personal belongings to catching up on mortgage payments to dealing with insurance companies - will be long-lasting and could leave many people in financial ruin.

Mortgage payments

In Houston and nearby areas impacted by the storm, there are "more than twice as many mortgage properties with nearly four times the unpaid principal balance" as there were in the counties hit by Hurricane Katrina in 2005, according to data cited by CNBC from Black Knight Financial Services.

An aftermath on par with Katrina could mean 75,000 Houston borrowers may fall behind on their mortgage payment in the next two months, and 45,000 could become "seriously delinquent" within four months.

Mortgage lenders Fannie Mae, Freddie Mac, and the Federal Housing Administration (FHA) are offering some relief for homeowners affected by Harvey, forbearing mortgage payments at least 90 days, and potentially up to a year. Borrowers won't have to make their monthly payments and no penalties will apply, though interest will still accrue.

Flood insurance

Only 17% of the homes in the eight counties left in Harvey's wake have flood insurance, which can cost homeowners anywhere from $500 to $2,000 annually depending on the location, according to the Washington Post.

For the more than 80% of homeowners without flood insurance, private charity and grants from the Federal Emergency Management Agency (FEMA) is all they have. At the high-end, a homeowner who can prove their house is unlivable can be given up to $33,300 from FEMA. Still, the process can take weeks or months after a disaster like Harvey.

A lack or delay of funds could force many people into debt or bankruptcy, particularly if a home is the most valuable financial asset they own.

"There are some early indications that this is going to have an exceptionally large impact on the number of people who are totally uninsured," Howard Mills, the global insurance regulatory leader at Deloitte, told Quartz.

Most flood insurance policies are issued through the government-run National Flood Insurance Program (NFIP), which is already $25 billion in debt after payouts from Hurricanes Katrina and Sandy. Those policies will cover up to $250,000 in rebuilding costs for structural damage to residential properties.

Filing a claim is the first step, and then homeowners will need to document the damage with photos and make an appointment for an adjuster to visit. As thousands of people move through this process simultaneously, claims and payments are likely to be delayed.

Replacing belongings

Legendary investor Warren Buffett - whose company Berkshire Hathaway owns Geico and several other insurers -said it's likely that 10% of the vehicles Geico insures in the Houston area will have to be replaced.

Flood insurance policies through FEMA will replace damaged personal belongings such as clothing, TVs, and furniture up to $100,000. But with the vast majority of homeowners in the area uninsured, the losses could be immense.

Managing money

Tens of thousands of people quickly evacuated their homes before Harvey's first landfall, possibly leaving behind important financial documents, like social security information, tax documents, insurance policies, and mortgages. These are all replaceable, but may take some time.

The Federal Trade Commission suggests reaching out to credit card companies, lenders, and other financial institutions to ask for help. Many could be willing to defer payments, extend grace periods, waive late fees, postpone collection or foreclosures, or raise credit limits.