A lot of things happened after Hurricane Ida came to the country with its category-4 landfall and multiple states flooded due to continuous heavy rainfall. A lot of businesses were shut down with the impacts of the hurricane, personal property washed away, and homeowners are at a loss.

Disaster Assistance, Disaster Loans, and Flood Insurance for New York

Today, we want to cover how disaster assistance, disaster loans work, and how they would impact your flood insurance. Can you get both flood insurance, disaster assistance, or disaster loans?

Disaster Assistance

When it comes to the application process with the disaster assistance there are two things that must happen first: a presidential declaration for the natural disasters that recently happened, and you must meet certain standards and restrictions to be one of the eligible individuals for this federal government assistance.

Considering what happened with Hurricane Ida and the consistent flood risk in New York even though the hurricane had already passed, it's a good thing that President Joe Biden gave the government a green light for disaster assistance during these trying times, this means that all individuals may be eligible to get one.

However, disaster assistance isn't like flood insurance where you can get one that easily. This has to go through a tedious process for you to get that financial assistance from the government. The Federal Emergency Management Agency (FEMA) will first contact you via U.S. mail or email for the next steps.

They will also send out an inspector to survey your home to see if it's livable. Before, this means that they will get inside and on every nook and cranny of your property, but considering the coronavirus pandemic, they will survey it only from the outside.

If they were unable to contact you or saw your property is still livable, then your disaster assistance might get denied. Now, it's important to note that if your insurance already covers all the damages that your property incurred during the New York flooding, your disaster assistance will also get denied. It's also important to mention here that if more than one person applied for disaster assistance, one of these two people will get denied.

Disaster Loans

Now when it comes to disaster loans through the U.S. Small Business Administration loan, this would come into play if you need more financial assistance of $200,000. Most of the time, we see business owners utilize this option to have their business bounce back from any flood damage and we might see it in New York as well.

What's important to note here is that these are low-interest, low-term loans that aren't covered by your insurance by they can get any amount written in your disaster assistance and flood insurance. Generally, this means that you can get all three at once however it's most likely that your SBA loan will collect your insurance coverage, disaster assistance, and put it into one disaster loan. This disaster loan can cover uninsured buildings, contents, or sometimes even vehicles. 

Flood Insurance

Now, we've talked a lot about flood insurance whether it's from FEMA or the private flood insurance market, and the thing is you really won't need to apply for disaster assistance and disaster loans if you have everything correctly written on your policy.

A standard flood insurance policy will cover any flood-related damage for any homeowner and/or any business owner. This coverage maxes out at $250,000 in building damage and $100,000 for the contents within the insured building when getting the flood policy from FEMA and the National Flood Insurance Program (NFIP).

Although this recent presidential declaration from Biden would help you also get additional living expenses from FEMA and the NFIP, generally this won't be included in your coverage with federal flood insurance.

Good thing is that the private flood insurance market will be more versatile with its coverage as it doesn't really have any coverage limits. Generally, private flood policies can cover you for more than $250,000 and $100,000 for building and contents coverage respectively. You also get to easily opt-in for additional coverage such as additional living expenses, loss of use, and replacement costs.

It's important to note that even with flood insurance, disaster assistance is still up for grabs however this may impact your flood insurance rates and flood insurance premiums as most of the time, a property that applied for disaster assistance gets moved into a high-risk flood zone.

All of these options will be available for New York especially after what happened with Hurricane Ida however you need to be very mindful of which ones you really need since it can bite you back in the future.

If you have any questions on disaster assistance, disaster loans, how to get flood insurance, and understanding your flood risks, reach out to us below:

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Remember, we have an educational background in flood mitigation which lets us help you understand flood risks, your flood insurance, and mitigating your property long-term.

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Disasters can impact businesses and peoples lives in many ways, it doesn't even have to be a major disaster for things to be impacted. As a business owner many times you have many more people to think about than your own family.

Through the years we have seen a wide range of disasters strike the United States.  Natural disasters through the years, Terrorists attacks in 2001, and now a pandemic in 2020.

 

 

We are going to have a series of blogs that address what you can be doing during this terrible pandemic to help your business and individuals.

We will discuss the four core areas of disaster planning

  1. Disaster preparedness
  2. Disaster response
  3. Disaster recovery
  4. Disaster mitigation

 

In 2011 when the United States was hit with a terrorist attacks it basically shut the entire country down for a short while. Air travel was completely grounded for the first time ever, Stocks plummeted, and businesses were hurting. This was the first time a terrorist attack disaster of this level had occurred in the United States.


The same thing is currently occurring with the Coronavirus pandemic in the United States. You have a service industry that has basically been shutdown for a minimum period of at least 6 weeks. This will cause many businesses to go out of business and force many individuals into bankruptcy. You could see unemployment claims at an all time high.

So what can be done or what could have we done as business owners to help prepare for these things?

First of all let's make one thing clear no one could have fully prepared their business or individual life for what the Coronavirus is currently doing to the United States economy and world economy.

Being a small business owner I know these are uncertain times and you have to manage the best way you can.

One way is through disaster preparedness. The purpose of preparedness is to hopefully have the things in place that you never have to use. Whether we are talking about the flooding in Tulsa Oklahoma, Nashville Tennessee, Knoxville Tennessee or the Coronavirus the first step is preparedness.

Having a disaster preparedness plan in place can go along way to minimize the impact that a disaster has on your business. There are two things we want to talk about that should be part of this place.

  1. Insurance coverage
  2. 3-6 month emergency fund
  3. Business adaptation  plan

Insurance coverage can be a first line of defense to protecting a business and preparing for a disaster. Let's look at the flooding that occurred in the midwest in 2019. You had areas in Iowa, Nebraska, and Oklahoma that were hit with one flood after another closing many businesses.

So how could insurance help protect a business in this scenario?

In this situation the right commercial flood policy could go along way in protecting you. If you own the building it could help repair or replace the building. If you have large amounts of inventory that was destroyed it could help replace it.

So what if your business could not open back up for a while?

How could you possibly cover expenses if you can't generate income? This is where loss of income comes into play. This coverage could help cover those expenses while your business can't generate income.

So how much coverage do you need?

We normally recommend keeping 6 months of expenses on your flood insurance policy for this.

So while having insurance is great certain coverages may not always be available.

This why we recommend having a business emergency fund as part of your disaster preparedness plan. The emergency fund could help cover your expenses like payroll for a short period of time. Being a new business owner it can be hard to save this kind of money, because you are putting everything into the business.

When possible its recommended that you put a minimum of 10% of the business income into this plan. Some people recommend putting more but as new small business owners every dime counts.

Business emergency funds can also play a major role in helping lower stress during these disaster times. One reason is it can be the difference between going out of business and staying in business.

Adapting to and preparing for changes in business is crucial. In 2020 many businesses have already shown us that they don't have the ability to adapt to major changes. One of these changes that many businesses have faced is shifting their workforce to work from home. Working from home will not work for every industry. For example it just would not work for the food industry. However many businesses in the food industry have shown us their ability to adapt to rapid changes in a crisis environment. Many food establishments that were traditional sit down places have now shifted to curbside and delivery services. This ability to be able to adapt to some of these changes will be why many businesses continue to grow in such a difficult environment. 

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Remember a plan is not any good if it is not put in action or practiced. Ever seen kindergarten kids do a fire drill for the first time? Its pretty rough

This is exactly what could happen to your organization if this plan is not rehearsed. Maybe it's having people work from home once a quarter to make sure they have a set up that would work. Maybe as a restaurant owner its making sure that your kitchen staff can handle dine in orders and curbside delivery services.

We have talked about some recommendations on how to prepare a business for potential disasters. Maybe you have more questions about disaster plans or flood insurance for your business. Then make sure to visit our website for more information. You can also check out our daily flood education videos on our YouTube channel.

 

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