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.
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?
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.
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.
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:
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.