How to get money if you don’t have flood insurance

Barbara Marquand
Damage of Hurricane Irma, on the Dutch Caribbean island of Sint Maarten. Hurricane Irma, rampaging across the Caribbean, has produced sustained winds at 183 miles per hour.
Gerban Van Es | AFP | Getty Images

If a flood wrecks your house and belongings, and you don't have flood insurance, what can you do?

That's the billion-dollar question with Irma headed to Florida and cleanup after Harvey beginning.

Some help from the federal government will be available, and many will need it.

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CoreLogic, an analytics company, estimates Harvey caused $25 billion to $37 billion in damage to homes in Texas and Louisiana. Of that, 70 percent — $18 billion to $27 billion — of the damaged property is uninsured, the company says.

Only about 12 percent of homeowners nationwide and 14 percent in the South had flood insurance in 2016, according to an Insurance Information Institute poll.

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Home insurance does not pay to repair the house or replace belongings damaged by flooding. Flood insurance is separate coverage. Most flood policies come through the National Flood Insurance Program and are serviced by private insurers (like your home insurance company).

Comprehensive car insurance, an optional coverage, pays for flood damage to a vehicle. If you have purchased only the minimum liability insurance required by your state, you don't have coverage for flood damage to your car.

Getting help if you don't have flood insurance

If your home and belongings are flood-damaged and you don't have flood insurance, some help may be available from the federal government through small grants and larger low-cost loans.

The maximum amount of FEMA grant money for repairs is $33,000 for a household. Up to $200,000 is available through loans from the U.S. Small Business Administration. You don't have to own a business to qualify. Federal help is available only for a primary home, not for second homes.

You can apply for disaster assistance after the president declares your state a major disaster area and your county is named for individual assistance.

Low-cost loans from the SBA

You might be eligible for a low-cost loan through the U.S. Small Business Administration if your home or stuff was damaged. The money is only for uninsured losses and if the damaged home is your primary residence. The maximum interest rate is 4 percent if you can't get credit elsewhere and 8 percent if you can get credit from another lender. The terms are for up to 30 years. Here's what's available, along with some of the restrictions:
Low-cost loans from the SBA

  • Loan of up to $200,000 to repair or replace your primary home. You can't use the loan to make upgrades or additions, unless they're required by building codes.
  • Loan to refinance up to $200,000 of a mortgage. This is available only if you can't get credit elsewhere, suffered uninsured damage and plan to make repairs.
  • Loan of up to $40,000 to replace damaged belongings, such as clothing, furniture, cars and appliances. Renters and homeowners can apply.

You can apply for an SBA loan online or apply in person at a FEMA Disaster Recovery Center.

FEMA grants

FEMA's Individuals and Households Program provides money for temporary housing, repairs and construction. The limit is $33,000 for a household. The money can't duplicate what insurance provides, but it can supplement it. You can apply for money to:

  • Rent a place to live if your home is uninhabitable. If no rental units are available, you can apply for temporary housing. The help is for up to three months initially, with a maximum of 18 months.
  • Repair uninsured damage. (You can also apply for an SBA loan for what the grant money doesn't cover.)
  • Repair or replace belongings if you don't qualify for a loan through the SBA
  • Help to pay other disaster-related expenses, such as funerals, medical and dental help and child care

In very rare cases, FEMA provides up to $33,000 to replace a home if it can be done with limited money or to build a home in an area designated by FEMA.

If you need help, apply for disaster assistance as soon as possible.

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