How Flood Victims Can Get Financial Help
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It may take weeks before victims of the massive flooding in southeastern Texas and southwestern Louisiana area can return to their homes and businesses. The unprecedented heavy rains have already resulted in the deaths of at least eight people and forced tens of thousands of people out of their homes.
By one estimate, some 233,000 homes in Texas may be affected, and the cost to rebuild them could reach almost $40 billion.
According to a CNN report, only 15 percent of homes in Harris County, where Houston is located, have flood insurance. Flooding is typically not covered by traditional homeowners or renters insurance.
But even those who don't have flood insurance can take steps to get financial help.
Apply for Federal Disaster Assistance
President Trump's disaster declaration for the state of Texas last week means disaster aid will be available "as needed and warranted" to residents in the affected counties.
You could be eligible for a federal grant to be used toward temporary housing, emergency home repairs, and other urgent measures. Both homeowners and renters are eligible. You can apply online for federal disaster assistance or call 1-800-621-FEMA (3362).
FEMA recommends you apply even if your county has not yet been federally declared for individual assistance as more counties may be included. You'll need to provide the Social Security number from at least one member of your household, and have an estimate of your family's gross household income at the time of the disaster.
Here's what could be available to residents of affected areas:
• Rental payments for temporary housing. Homeowners whose homes are deemed unlivable can get initial financial assistance for up to three months; renters can get help for at least one month. That financial assistance may be extended after the initial period on a case-by-case basis.
• Grants to make damaged dwellings safe, sanitary and functional. The money can go toward home repairs and replacement of essential items that insurance doesn't cover.
• Grants to replace personal property. These funds are meant to meet medical, dental, funeral, transportation, and other "serious disaster related needs" not covered by insurance, charity or other government programs, FEMA says.
• Low-interest loans. The loans, provided by the Small Business Administration for residential losses not covered by insurance, are available up to $200,000 for primary residences, and $40,000 for personal property, including losses by renters. Interest on the loans, which are presently available in Bee, Goliad, Kleberg, Nueces, San Patricio and Refugio counties, will be as low as 1.75 percent annually, for up to a 30-year period, the SBA says. Other SBA loans are available for small businesses, small agricultural cooperatives, and most private not-for-profit organizations.
Make a Claim Now With Your Insurer
A new Texas law that's effective September 1 reduces the penalty an insurer would face when a policyholder successfully sues it for late claims payments. That suggests it could be worthwhile to file a claim with your insurers before Friday, if you can manage it.
Your first contact, called a first notice of loss, starts the claim ball rolling. So if you are covered by insurance for your car, boat, home or mobile home, in addition to applying for federal disaster assistance, contact the person or company that sold you your policy.
Unlike homeowners insurance, the "comprehensive" portion of your auto insurance does cover flood damage. While homeowners insurance doesn't cover flooding from rising water, it does cover water damage from, say, a leaking roof. Considering the driving rains that inundated the region, some homes may qualify for homeowners insurance payments toward such damage.
Get an Extra Boost From Flood Insurance
Those holding flood insurance policies through the National Flood Insurance Program have yet another potential avenue to get funds quickly. They can apply with the insurer that provided their flood policy for an advance payment even before an adjuster comes out to investigate the flood damage to their property.
The Federal Emergency Management Agency, which runs the NFIP, encourages the insurance companies that service its flood policies to begin providing flood insurance policyholders with advance payments shortly after a disaster strikes.
Historically, advance payments prior to the adjuster's investigation of the loss have been up to $5,000 for policyholder's building and the building's contents. To qualify, you'll have to have at least that much flood coverage. You'll later need to prove you had flood losses at least that high.
After flooding in Louisiana last August, FEMA recommended advance payments of up to $5,000 toward fixing home damage and replacing home contents. (If policyholders provided photographs depicting the flood damage and documentation validating out-of-pocket expenses, they could get an advance payment of up to $10,000.)
FEMA would not confirm that it has yet recommended advance payments for Hurricane Harvey victims. But Aon National Flood Services, the nation's largest flood insurance policy servicer, will be providing those payments to many policyholders in the affected region, says Cynthia DiVincenti, the Kalispell, Mont.-based company's vice president of government programs and business quality assurance.
Policyholders can get those funds even before they submit documents showing what they lost. They can also get up to 50 percent of their claim paid out after an adjuster's inspection but before a proof of loss document is signed, according to FEMA.
Keep in mind that the payouts you may get from federal disaster assistance are for losses that aren't covered by your flood insurance policy.
Traditional homeowners and renters policies do not cover damage from flooding. Victims without flood coverage, either from the federal government or private insurers, will have to rely on their own savings—and on federal, state, and charitable funding—to recover and rebuild. Flood insurance is not just for people in high-risk areas.
FEMA says people outside of high-risk areas file more than 20 percent of flood insurance claims in a given year, and receive one-third of disaster assistance for flooding.
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