Be ready before the floods begin.
Effectively managing risk is important in dealing with and recovering from a disaster. This explains how to manage risk through insurance and other disaster programs in order to recover from a disaster as quickly and easily as possible. The following information comes from the Federal Emergency Management Agency (FEMA) and LSU Extension.
Those who own their home undoubtedly have homeowner’s insurance. Many people are unaware, however, of the limits on the protection a homeowner’s insurance policy offers. For example, a homeowner’s policy does not cover damage caused by floods. It may offer some protection from loss caused by wind, rain, hail, snow, lightning, and freezing temperatures.
While homeowner’s insurance does not cover losses from rising water, it usually does cover water damage from such things as leaking roofs, broken windows, and broken pipes but excludes mold damage. Most policies do not cover sewer backup unless a sewer backup endorsement is purchased.
Those in a designated special flood hazard area whose structure is substantially damaged by any force (wind, water, fire) may be required by the local permit office to meet the flood damage prevention requirements for new construction; for residential structures this usually means elevation—that is, rebuilding the residence above the expected high-water mark. Owners of structures in special flood hazard areas can partially insure themselves for the added expense by purchasing a Code Compliance endorsement on their homeowner’s policy.
People don't need to live near water to be flooded. FEMA’s Federal Insurance Administration makes the National Flood Insurance Program (NFIP) available to residents of communities that adopt and enforce floodplain management ordinances that represent sound land use practices. Those who have purchased coverage through the National Flood Insurance Program at least thirty days before being affected by a flood will be protected against property damage caused by such flooding.
Most, but not all, federal assistance is in the form of low-interest loans to cover expenses not covered by state or local programs, or private insurance. People who do not qualify for loans may be able to apply for a cash grant. The Farm Services Agency (FSA) or Small Business Administration (SBA) may offer low-interest loans to eligible individuals, farmers, and businesses to repair or replace damaged property and personal belongings not covered by insurance.
Individual and Family Grant (IFG) Program
Individuals may be eligible for grants to help recover necessary expenses and pay for serious needs that cannot be met through insurance or other forms of disaster assistance. Examples are housing, personal property, medical, dental, funeral, transportation, and required flood insurance premiums incurred as a result of the disaster.
Temporary Housing Assistance
This program assures that people whose homes are damaged by disaster have a safe place to live until repairs can be completed. This program is designed to provide funds for expenses that are not covered by insurance for homeowners and renters who are legal residents of the United States and are displaced by the disaster.
For more information, visit https://www.disasterassistance.gov/.
The Internal Revenue Service allows certain casualty losses to be deducted on federal income tax returns for the year of the loss or through an immediate amendment to the previous year's return.
- Internal Revenue Service Publication 584 - Casualty, Disaster, and Theft Loss Workbook (Personal-Use Property)
- Internal Revenue Service Publication 2194B - Disaster Losses Kit For Businesses: Help From the IRS
Excise Tax Relief
Businesses may file claims with the Bureau of Alcohol, Tobacco, and Firearms (ATF) for payment of federal excise taxes paid on alcoholic beverages or tobacco products lost, rendered unmarketable, or condemned by a duly authorized official under various circumstances, including where the President has declared a major disaster.
Applying for Disaster Rehabilitation Assistance
After a disaster, individuals may need to seek financial assistance to restore their home or farm. There are many sources of assistance, but everyone will be required to provide certain information. Assemble the necessary information before meeting with any agents.
What will be needed for most grants or loans:
- Itemized list of losses
- Estimates of the repair or replacement cost of each item
- Estimates of new flood insurance premiums
- Federal income tax returns from the last three years (copies)
- Deed, mortgage, or renter's lease (copy)
- Previous insurance policy or insurance settlement (copy)
For personal loss:
- Proof of monthly income (stubs, statements)
- Driver's license and Social Security number
Business or farm loss:
- A brief history of the business or farm
- Personal and business financial statements
- Loan repayment schedule
- List of bills owed
- Farm Services Agency information on farm crop base and assigned yields