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Homeowners Insurance and Federally Declared Disasters

Not every loss is covered under an insurance policy. What do you do after a major disaster when your insurance policy does not respond?

This article was originally written after a storm slammed the North Eastern United States in 2007. The then president, President George W. Bush issued a Major Disaster Declaration for the states of Maine, New York and New Jersey. Since then the United States has suffered through several disasters. According to the FEMA website, there were 81 declared disasters in 2010 alone.

The storm that comes to most homeowner’s minds when the term “major disaster” is mentioned is the 2005 Hurricane Katrina disaster. Unfortunately, that was not an example of disaster mitigation and recovery at its best. Since then, measures have been taken to prevent future mishandlings.

As a homeowner, what can you expect if you are caught in the unfortunate situation of being in a disaster area? Let’s take it step by step:

What is a Disaster?

A major disaster can be declared as a result of many things including but not limited to earthquake, flood, hurricane, tornado or fire. A disaster is of the magnitude that requires resources far beyond what the local or state government can handle (Hurricane Katrina for example). Once the President has declared the area a major disaster area, the government can then begin the implementation of long-term federal recovery plans through FEMA (Federal Emergency Management Agency).

Declaring a disaster area also allows for federal funding and assistance to meet the specific emergency needs. The scope is smaller and the recovery processes are not long term.

What can a Homeowner Expect with a Disaster Declaration? 

Disaster assistance comes in the form of money, loans and/or temporary housing to those affected by a natural or man-made loss that is not covered by traditional homeowner insurance. It does not replace an insurance policy, because unlike insurance policies, disaster assistance is not intended to restore your property to pre-damage condition, it is meant to help with critical expenses that are not otherwise covered. There are three tiers of assistance:

  • Personal Assistance: FEMA may provide temporary housing and assist financially with home repair or replacement. In certain circumstances they will assist and/or provide money for housing construction. The type of help provided by FEMA may vary depending on the situation.
  • Community/Public Assistance: As the title suggests, FEMA may provide aid to the local or state government to help pay for the cost of rebuilding the community.
  • Hazard Mitigation: This involves making grants available to assist in the implementation of steps to reduce the likelihood of such damage occurring in the future.

How Homeowners Get Disaster Assistance

First go to the FEMA website to determine if in fact you are part of the disaster declared area. If so, register with FEMA either through their website (if a functioning computer is available) or by calling 1-800-621-FEMA or 1-800-462-7585 (TTY) for the speech and hearing impaired. By registering through FEMA’s website, there are step by step tutorials as to how to file a claim and what to do next.

Surviving a major disaster is an emotional and life changing experience. FEMA’s goal is to help people try to put their lives back together by creating a safe, sanitary and functional place to live.

About the author: Felicia A. Williams is a wife, mother, freelance writer and owner of Tidbits About Money.

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