Disaster assistance, flood insurance, and disaster loans can always be confusing. What applies to what situation? Can they be used together? Let's talk about that a little bit so we can help prepare you when you have a flood loss.

First of all remember, disaster assistance and SBA loans are only going to be there when there's presidential declarations are put in place and you've met those restrictions. SBA loans, which is basically the main loan the government uses for disaster loans, is going to have income restrictions. So it could be that you can't get financing or you can't get help other areas. And this is where SBA loans come into play.

So here's the question though, if you have got disaster assistance, can you get a SBA loan? The answer to that question is yes. What happens is SBA loans can cover up to $200,000. So let's say that you have $80,000 in damage and disaster assistance covered $40,000. So let's say that an SBA loan could cover up to $200,000. They're going to take out whatever you got on disaster assistance. So what if you had insurance? Well, an SBA loan is going to do the same thing. They're going to take out whatever you got from maybe disaster assistance and insurance. So let's say those two combined for $180,000, then you might get an extra 20 grand from doing a small business loan, if it covers up to $200,000.

The other key area where SBA loans come into play is just simply doing the application. We get a lot of questions from people if I do an SBA application in the middle of the disaster assistance process, am I going to lose my disaster assistance? Am I going to get delayed?" The answer to that question is no. Not only that, but applying, simply just applying for an SBA loan could open up other areas what are called other needs assistance through the FEMA grant. This could be uninsured furniture, uninsured personal property, and even uninsured vehicles could possibly be covered up to $40,000 in damage. So these are the important things when it comes to disaster assistance, disaster loans and insurance.

Just remember, it's not an and or world you could end up having all three put together. Now you might have very limited coverage when it comes to disaster assistance and an SBA loan because flood insurance, if you've got it listed correctly, should have up to $250,000. You should have additional living expenses listed on that flood insurance policy so you don't have to worry about that. You should have replacement cost if it's outside the National Flood Insurance Program. So make sure that you max out your flood insurance policy because it's the best thing money can buy when it comes to a coverage standpoint.

So when you're doing this, just make sure to max that out. What's going to happen then is you might have a $250,000 replacement policy and you might have $100,000 on contents. So maybe you do need more than that on personal property. Maybe you can get some other needs covered under grants through FEMA. But remember, insurance is the first defense, then assistance is there, and  if the assistance doesn't cover it, then that's when you go and look for a disaster loan.

So if you've got questions about disaster loans or disaster assistance, remember, you can always go to disasterassistance.gov or femawww.fema.gov.gov. You can also visit our website regarding flood insurance and these other disaster assistance, disaster loan questions, floodinsuranceguru.com. Also, remember to like our Facebook page  and our YouTube channel, The Flood Insurance Guru, where we do daily flood education videos. You can also give us a call, 205-451-4294.

Chris Greene


Chris Greene

President of The Flood Insurance Guru
M.S. in Emergency Management with a focus in Flood Mitigation