Flood damage debris tossed out the window (C) Daniel FriedmanHow to Obtain Financial Assistance for Building Cleaning & Repairs
After a Building Has Been Flooded or Damaged by Earthquake, Hurricane, or other Disaster
Flood Damage Repair Guide FEMA/ARC expanded Step 7

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How to Obtain Financial Assistance for Building Cleaning & Repairs after earthquake, hurricane, flood or storm & wind damage to a building.

This article series gives action & repair priorities if your building has been flooded, or damaged by another disaster in an easy to understand guide.

We describe procedures for for flood damage assessment, setting priorities of action, safe entry procedures for damaged buildings, first steps to protect a building from further damage, how to dry out the building, how to return the utilities to operation, how to clean up a flooded or damaged basement or building, how to rebuild a damaged building, and how to prepare to minimize danger and damage hazards from future disasters.

We also provide special information about avoiding or minimizing mold damage in wet or flooded basements or buildings. Adapted and expanded from Repairing your Flooded Home, American Red Cross & FEMA & from additional expert sources.[1] NOTICE: neither the ARC nor FEMA have yet approved the additions & expansions we have made to the original document.

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Step 7: How to Obtain Financial Assistance for Building Cleaning & Repairs After a Building Has Been Flooded or Damaged by Earthquake, Hurricane, or other Disaster

Check on Financial Assistance

How much you rebuild and replace depends on what you can afford. Four sources of financial assistance can help you through recovery: insurance, government disaster programs, voluntary agencies, and businesses. If you are fully insured (80 percent of the replacement cost of your home), you may only have to pay the deductible and your flood insurance policy will pay for professional cleaning and reconstruction. Even if you are insured, the other sources of assistance can help with expenses that your insurance policy doesn’t cover.

Voluntary Agencies Providing Finaancial Aid to Disaster Victims

Private voluntary agencies such as the American Red Cross, Salvation Army, and church groups are usually on the scene during or right after a flood. These groups usually provide for immediate needs such as clothing, groceries, shelter, medical aid, and counseling.

Some private organizations can help you restore your home. They may offer supplies or sometimes volunteers to help you clean up and rebuild. The services are usually provided free of charge regardless of a person’s eligibility for government aid. The services are usually provided free of charge regardless of a person’s eligibility for government aid.

The American Red Cross provides emergency assistance to people affected by disasters, whether or not the affect area has been declared a disaster area by a governor or the President. All Red Cross disaster assistance is free and is provided as a gift of the American people. The Red Cross does not receive funding form the government to provide this assistance.

The American Red Cross can help by providing you with a voucher to purchase new clothing, groceries, essential medications, rent, bedding, essential furnishings, and other items to meet emergency needs. The Red Cross can also provide you with a cleanup kit: mop, broom, bucket, and cleaning supplies. Listen to news reports to find out where to go for this assistance, or look up American Red Cross in the telephone book and call. You can also find your local Red Cross chapter by doing a search through the Red Cross site on the Internet’s Wide World Web at http://www.redcross.org.

Businesses Providing Financial Aid to Disaster Victims

Your local TV, radio and newspapers will usually publicize how businesses are contributing to the recovery process. Some businesses may offer reduced prices, but be wary of “flood sales” that are selling flood damaged items.

Some insurance companies and lenders may let you delay your monthly payments. Sometimes banks will make lower interest loans available for reconstruction. While these may seem easier to obtain than government disaster loans, their interest rates are usually higher.

Be careful about out-of-towners offering “special deals,” especially repair contractors. Sometimes the local builders’ association will offer advice on reconstruction or advice on choosing contractors. (See Step 8 on dealing with repair contractors.)

How to Make Flood Insurance Claims

You may have as many as three separate insurance policies:

  • homeowner’s general insurance policy
  • flood damage insurance policy
  • wind and hail damage insurance policy

This section covers the procedures for handling a flood insurance claim. Claims for non-flood damage will be handled in a similar manner.

You should call your flood insurance agent to report your damage as soon as possible after the flood. Your agent will arrange for an adjuster to visit your home so that your claim can be settled. Be sure you leave phone numbers where you can be reached.

If you are unable to contact the local agent, call the National Flood Insurance Program at 1800-638-6620.

Under ideal conditions, the adjuster should contact you to set up an appointment to visit your home within a few days after you call your agent. But if flood damage is widespread in your area, it may take longer for the adjuster to visit, and it make take time for your claim to be settled. If flooding is extensive, the adjusters will schedule their visits to review the most severe damage first. The adjuster cannot estimate your damage until floodwaters are away from the building.

In the meantime, protect your home and its contents from additional damage, but do not make repairs that make it impossible for the adjuster to see the damage. Step 2, “Give Your Home First Aid,” discusses how to protect your home from further damage.

While you are waiting for the adjuster, the following suggestions will help you organize the information that you will need:

Take photos or videotape the damage to both the inside and outside of the building and the contents. . Separate your damaged and undamaged belongings and store them for the adjuster to examine. . Find receipts, canceled checks, or proofs of purchase for high cost items such as major appliances, if possible. The adjuster will need the manufacturer’s name; serial and model numbers; price; location and date of purchase; and a description of the items.

The claims adjuster’s job is to collect information that is sent to a central office for processing. The insured (you) must file a Proof of Loss form within 60 days of the flooding. In most cases, the adjuster will file this form for you. The form states the amount of your loss and is signed by both the insured and the adjuster. An important point to remember is that you will not be reimbursed for expenses not authorized by the adjuster.

You can ask the adjuster for an advance or partial payment for your building or contents loss,

Some Points on Settling Flood Damage Insurance Claims

  • You are supposed to be reimbursed fairly for your loss, but you are not supposed to profit from a disaster.
  • You cannot collect more than the face value of your policy.
  • You cannot collect for uninsured items, such as landscaping.
  • Most adjusters receive a flat salary or compensation on a per case basis. There are no financial incentives that encourage the adjuster to give you a small claim payment.
  • You should get the adjuster’s name, company, and phone number. He or she will probably be from out of town.
  • In most cases, you will be reimbursed for the actual cash value of an item. That is the cost of replacing the item minus depreciation. If your policy is for 80 percent or more of he replacement cost of your house, you will be reimbursed for the replacement value of damage to your house (no depreciation).
  • If you have problems with a flood insurance claim, your policy should list an office or telephone number that you can contact or you can call your insurance agent.

Flood Damage Insurance Payout May be Limited for Basement Apartments

Watch out: when deciding to restore & rebuild a basement-level apartment (also referred to as "garden apartments") be aware that flood insurance policies for below-grade-level spaces in buildings cover only damage to the mechanical systems (boilers, water heaters, electrical panels).

Following Hurricane Sandy in 2012, by January 2013 The New York Times reported that in some areas such as Hoboken NJ, in order to even attempt to obtain financial aid and despite buildings being covered by required flood insurance under NFIP, owners of basement-level or garden apartments must apply for grants to receive a portion of storm damage aid approved by the U.S. Congress. Further, even if some grants are approved the levels will not be sufficient to cover the total costs of cleaning and repairs to these flooded dwelling areas.[15]

OPINION: While some building owners and local leaders may argue for changes in the federally-sponsored National Flood Insurance Program (NFIP) to include coverage basement dwelling spaces, to avoid bankrupting the NFIP it may be more reasonable for NFIP to reduce or even eliminate flood protection insurance for buildings constructed or re-constructed in locations that can be expected to suffer repeated flood or storm damage unless the structure has been designed to withstand those conditions.

OPINION: Failure to recognize the costs of providing federally-sponsored flood insurance protection for buildings that are virtually guaranteed to suffer costly damage at an increasing frequency means that other homeowners living in other more protected areas will be making NFIP premium payments that are basically subsidizing those who insist on building vacation or permanent housing in high-risk areas that should be aovided.

Tax Assistance for Flood Damage Losses

Hurricane, wildfire, floor or earthquake damage losses may be eligible receive some tax relief as well, subject to the following limitations: [17][18][19]

  • The loss must have been major and have been caused by an event that was sudden, unexpected or unusual.
  • The loss deduction is lmited to 10% of the taxpayers adjusted gross income or AGI, + $100.
  • The loss deduction can be taken only for uninsured losses. That is, you may have a disasater loss deduction if the insurance payments you receive did not cover all of the loss amount.
  • The loss deduction must be reduced further by any financial assistance payments made to cover building repairs that you received from FEMA (FEMA payments for emergency housing or food do not need to be deducted)
  • The loss deduction will also be adjusted to reflect the fair market value of the property immediately before the storm, not "when new" and not "replacement cost value"
  • You may also expect to have to provide document of actual repair cost expenditures to substantiate your claim.
  • See IRS Form 4684, Casualty & Theft Losses and IRS Publication 584 Casualty Loss Workbook.

Disaster Assistance Center DAC Visit Checklist

Before you got to a DAC or phone the toll-free number, do your best to get together the following information and documents. If you don’t have all of them, don’t worry; gather what you have and start your disaster assistance application process.

  • Your name, address, Social Security number, and identification
  • Telephone numbers where you or a neighbor can be reached
  • Names and ages of all persons living in your home at the time of the flood • Insurance papers, including the “Proof of Loss” form
  • A summary of your damage and a rough idea of the cost of repair or replacement (See Step 3.) • Your income and the income of all other members of your household.
  • Who you owe money to and how much you owe (mortgage, car loan, etc.)
  • The total amount of your living expenses (rent, mortgage, food, clothing, utilities, medical, and transportation costs)
  • Directions to your property, starting from a major road, and a road map with an X for your property. especially if you need the money to make your home liveable. An advance will not affect the total amount of your payment. Later, when your total payment is determined, the amount you were advanced will be subtracted from it. You can also ask for a partial payment if you disagree with the amount of your loss on the Proof of Loss form. Tell your adjuster if you disagree and ask what steps can be taken to straighten out your claim payment.

The check to settle your flood insurance building claim will most likely be in your name as well as the name of your mortgage holder. Some insurance companies may send the payment to your mortgage holder. Talk to your mortgage company ahead of time to make sure there won’t be a delay in getting your claim payment to you.

Disaster Assistance Providing Financial Aid to Disaster Victims

If the flooding was widespread and caused a lot of damage, your community might be eligible for state or federal aid. To receive such assistance, your community must be declared a disaster area by your Governor, a federal agency director, or the President. Local newspaper, radio and TV will keep you informed about disaster declarations and where to get information about any programs that might be available to you.

If the flood were severe enough for your area to be declared a disaster area by the federal government, the Federal Emergency Management Agency may open “teleregistration”, which provides a

toll-free number for you to call to request assistance. Or, it may open one or more Disaster Application Centers (DAC). These centers will give information and take applications for assistance and are usually located in a nearby school or other public building. They will be open during the day and early evening for several days to give people time to come in. Check local newspapers, TV and radio reports for the location and hours.

Federal disaster assistance may be available in some cases to deal with uninsured losses and needs. People who are not insured should go to a DAC first. If possible, those with insurance should file their Proof of Loss form before visiting a DAC. If there is a long wait, you can make an appointment for a later day, or use the toll-free number. (Look at FEMA’s site on the World Wide Web for more information: http://www.fema.gov).

When you go to a DAC or apply for disaster assistance, take the items listed below: The first person you will talk to at a DAC will be a receptionist. He or she will review your damage and needs, and identify which programs are most appropriate for you. You will receive a checklist of programs that can help you. You can then talk to representatives of these programs at tables in the DAC.

There are six types of federal or state disaster assistance. Except as noted, the following are available only if the President issues a disaster declaration for your area.

Disaster Housing Assistance

This program may provide a safe place to live until repairs to damaged homes are completed. Rent assistance or mobile homes may be provided to those without insurance. If repairs can be done quickly to make your house liveable, the program may provide funds to make those repairs.

Disaster Loans

Home and business owners, farmers, and others with real or personal property losses may be eligible for low interest loans. These loans are administered by the federal government’s Small Business Administration (SBA) and the Farmers Home Administration (FmHA). SBA and FmHA can provide loans even if there is no Presidential disaster declaration.

Eligibility and loan interest rates vary according to the income and financial condition of the applicant. Check your local paper or TV or radio station for the type of loans available for replacing your personal property and for repairing your house.

Individual and family grants

This program may provide funds for necessary expenses and serious needs. Grants can cover immediate expenses such as medical treatment, transportation, home repair, replacement of essential personal items, and the cost of protecting your property from the flood. Applicants must not have other financial resources or be able to qualify for an SBA disaster loan.

Income tax deductions

If a federal disaster declaration was made, you might quality to file an amended tax return for the past year and get a partial refund for your uninsured casualty losses. Even if no federal declaration is made, you can often deduct your uninsured losses on your next income tax return. Ask the Internal Revenue Service for Publication 547, Non-Business Disasters, Casualties, and Theft to get more information.

Floodproofing assistance

Restoring a building to its pre- flood condition used to be the focus of government disaster programs. Now, some programs encourage “floodproofing,”—that is, modifying the structure to help it withstand damage from the next flood. (See Step 8.) The SBA’s Disaster Loan program can loan additional money to cover certain floodproofing costs—ask SBA about it. Other programs will vary from state to state.

Counseling

A variety of programs give advice on recovering from a disaster. These include help with unemployment, food stamps, income taxes, insurance claims, legal issues, veterans benefits, and crisis counseling. Crisis counseling can be especially helpful in coping with problems as you recover from the flood before they get out of hand. Be sure to ask the Red Cross about “Disaster Mental Health” information.

See these additional flood, hurricane, earthquake or other damage assistance telephone directories

 

 

Continue reading at Step 8. Rebuild and Floodproof - separate article - Take your time to rebuild correctly and make improvements that will protect your building from damage by the next flood

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Step 7. Check on Financial Assistance at InspectApedia.com - online encyclopedia of building & environmental inspection, testing, diagnosis, repair, & problem prevention advice.

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