What to do if you don't have flood insurance

If your home or personal property are damaged by flooding and you don't have flood insurance, you can apply for federal government assistance if certain conditions are met.

Pat Howard 1600


Pat Howard

Pat Howard

Property and Casualty Insurance Expert

Pat Howard is a senior editor at Policygenius specializing in property and casualty insurance. His work has been featured on Property Casualty 360, Fatherly, MarketWatch, and more.

Published September 10, 2019|4 min read

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Flooding is the most expensive and pervasive natural catastrophe, affecting 98% of counties and accounting for 90% of all natural disasters in the United States. No one is immune to a flood disaster, and yet it’s estimated that only around 15% of homeowners have a flood insurance policy.

There are several reasons for this: almost half of homeowners incorrectly think their homeowners insurance covers flooding, some have already paid off their home and no longer have the lender requirement, and some have simply calculated that the minuscule chance of their home being flooded isn’t worth the cost of flood insurance.

But the fact is that homeowners without coverage are impacted by flood events every single day. If you don’t have flood insurance, you can still find a safety net. The U.S. government provides grants through the Federal Emergency Management Agency (FEMA), and loans through the Small Business Administration (SBA) to help you get back on your feet.

Key Takeaways

  • If you don’t have flood insurance and your home is damaged by floods, you can apply for federal government assistance

  • Federal assistance is available in the form of SBA Disaster Loans and FEMA grants

  • SBA loans and FEMA grants both have strict eligibility requirements

What assistance is available if you don’t have flood insurance?

If your home and personal belongings are damaged by flooding and you don’t have flood insurance, you have the option of applying for federal disaster relief in the form of grants or loans to help you with everything from meals to home repair.

There are two main forms of federal disaster relief:

  • A low-interest loan through the SBA that you eventually need to pay back

  • A FEMA disaster grant, which can reach up to $33,000 but end up being about $5,000 on average per household, according to FEMA

Assistance typeMaximum payout
SBA loan to repair or rebuild a home$200,000
SBA loan to replace or repair personal property (homeowners and renters)$40,000
SBA loan to refinance mortgageUp to the amount of the loan for repair or replacement ($200,000 max)
FEMA grant for loans and repairs$33,000

Something to keep in mind is both programs have eligibility guidelines on a case-by-case basis. For example, for disaster grants, you’re only eligible if the President officially declares a disaster and your home is located in a federally-declared disaster area. The home also must be your primary home — not a secondary or vacation home.

To see if your county is in a declared disaster area, click here.

Low-interest disaster loan from the SBA

An SBA disaster loan provides relief if your home and/or personal property are damaged by flooding, but you need to prove that the damage isn’t covered by insurance. If you’re not eligible for credit elsewhere, the maximum interest rate on SBA disaster loans is 4%. If you can get credit elsewhere, the maximum interest rate is 8%. Loan repayment terms last up to 30 years. With SBA disaster loans, you may be eligible for:

  • $200,000 for repair or replacement costs not covered by insurance. The damaged residence must be your primary home, not a seasonal home.

  • $40,000 for personal property repair or replacement for both homeowners and renters.

  • Refinancing options up to the amount of your SBA loan for home repair and replacement. The maximum refinancing amount is $200,000.

According to the SBA, they generally approve around 50% of the disaster applications that they receive. The majority of declined applications are because of low credit scores. If you’re declined an SBA disaster loan because of a low credit score, the SBA will refer you to FEMA’s unmet need program for a potential grant.

Click here to apply for an SBA loan.

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FEMA disaster grant

Another option if you’re uninsured is to apply for a FEMA grant through the FEMA Individuals and Households Program (IHP). You need to live in a federally recognized disaster area in order to qualify for an IHP grant.

The purpose of this program is twofold: to provide relief for folks without flood insurance, and to help those with flood insurance pay for disaster-related expenses not covered by their policy. If you’re getting a grant and you don’t have insurance, you don’t need to pay back the federal government. If you have insurance and you’re getting an IHP grant, you’re required to pay back the money, but you can use your insurance funds to do so.

The limit for FEMA IHP grants is $33,000. The money can only be used for temporary housing, construction and repairs, so the amount paid out to recipients is generally far less than the maximum amount offered. According to FEMA, the average payout of IHP grants is around $5,000. FEMA disaster grant money can be used for the following reasons:

  • Nutrition - The Disaster Supplemental Nutrition Assistance Program (D-SNAP) provides short-term food assistance to families in the wake of a natural disaster.

  • Home repairs - Relief funds can be used to provide temporary repairs to the structure of your home and electrical and plumbing systems.

  • Personal property repair or replacement - If you don’t qualify for an SBA loan, FEMA may give you a grant to repair or replace your personal possessions.

  • Temporary housing - If your home is uninhabitable because of a flood disaster, this component of the program pays for a temporary living arrangement. These funds are typically available in one- to three-month increments for up to 18 months after the federally declared disaster.

The federal government can provide disaster relief funding in several other ways, including emergency funds for utility bills, unemployment assistance, mortgage payments, tax relief, and more. Check out FEMA disaster-relief services here.

Private flood insurance

If you’re buying last-minute flood insurance and are concerned about the NFIP’s 30-day waiting period before your policy goes into effect, you may be able to get a private flood insurance policy with a shorter waiting period. Neptune flood insurance, for example, has a waiting period of just 10 days vs. the 30 under the NFIP.

Have questions about flood insurance? Talk to a licensed agent at Policygenius. We work with several carriers that provide both NFIP and private flood insurance, depending on your coverage needs.

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