It’s too soon to know how many homes were damaged or destroyed by flooding from Hurricane Helene across the Southeastern U.S. The storm’s 140 mph winds and record storm surge left a path of death and destruction rarely seen in U.S. history.

Homeowners who have flood insurance could get some financial relief for the waters that breached their homes. Unfortunately, though, a standard homeowners insurance policy doesn’t cover flood damage. Read on to learn how home insurance companies handle damage from floodwaters, what the Federal Emergency Management Agency (FEMA) covers, and what options are available if you have uninsured flood damage.

Does home insurance cover flood damage?

Home insurance provides financial protection if your home or personal belongings are damaged by a covered event (known in insurance speak as a covered peril). But a standard home insurance policy doesn’t cover damage caused by floods and certain other natural disasters, like earthquakes and sinkholes. Most renters insurance policies don’t cover flooding damage, either. You’ll need to purchase separate flood insurance for protection against most types of water damage.

The National Flood Insurance Program (NFIP) is the largest provider of flood insurance coverage in the U.S. The program was created in 1968 to provide flood insurance for areas at high flood risk, known as Special Flood Hazard Areas (SFHAs). The NFIP is managed by FEMA, but it works with more than 50 insurance companies throughout the U.S. that sell and service policies.

You can only buy flood insurance through the NFIP if you live in a community that participates in the program. Participating communities agree to enforce various floodplain regulations aimed at risk mitigation.

Many lenders require flood insurance on top of standard home insurance for as long as you have a mortgage. But even if you’re allowed to drop the coverage, doing so is extremely risky: Consider that a single inch of floodwater can cause about $25,000 worth of property damage. If your property experiences a major flood, you could be on the hook for a five- or six-figure repair bill. In a worst-case scenario, you’d need to pay for the full cost of repairing your home.

How much will FEMA pay for flood damage?

If you’re dealing with flood damage that’s not covered by insurance — whether it’s because you didn’t have flood insurance or the damage exceeds your policy limits — you may qualify for FEMA assistance.

FEMA’s Individuals and Households Program (IHP) provides financial assistance and other resources to people in a major disaster area who don’t have enough insurance to cover their losses. The maximum amount for an individual FEMA grant is $42,500 for housing assistance and $42,500 for other needs assistance to help with other disaster-related costs.

Note that a typical FEMA grant is much lower than these limits. Between 2016 and 2022, the average FEMA disaster grant was just $3,000, compared to the average NFIP payout of $66,000 during the same period.

The agency’s website states: “FEMA assistance is not a substitute for insurance, nor can it duplicate funding received for the same purposes.”

FEMA disaster assistance may be able to help with:

• Paying for temporary housing while you’re unable to live in your home, or providing you with a temporary unit if you can’t find a hotel or rental

• Funds to help you repair or replace your primary residence

• Hazard mitigation assistance to help you rebuild a more disaster-resistant home

• Help with other losses, such as replacing destroyed vehicles and personal property, or paying for disaster-related funeral or childcare expenses

To be eligible for a FEMA grant, you’ll need to live in an area that’s received a presidential disaster declaration. Flooding from hurricanes isn’t the only type of disaster covered. For example, you may be eligible if your home was damaged by wildfires, an earthquake, or a tornado. You’ll also need to provide proof of citizenship or legal residence status. Assistance is only available if the home that was damaged is your primary residence.

If you have insurance that doesn’t cover all your disaster-related expenses, you may still qualify for a FEMA grant. However, FEMA individual needs assistance can’t be used for expenses your insurance is covering.

The easiest way to apply for assistance is to enter your ZIP code on disasterassistance.gov. You can also use FEMA’s Disaster Recovery Center locator to search for in-person assistance or call the helpline at 800-621-3362.

SBA loans: An option for costs FEMA doesn’t cover

If you have flood damage or other expenses from a disaster that neither FEMA nor your insurance covers, you may qualify for a low-interest disaster loan from the U.S. Small Business Administration. Loans are available not only to businesses but also to homeowners, renters, and nonprofits in major disaster areas.

You could qualify for up to:

• $500,000 to repair or replace your primary residence if you’re a homeowner

• $100,000 to repair or replace your personal property if you’re a homeowner or renter

SBA loans aren’t available to secondary residences or vacation homes. You also can’t use the funds for upgrades or additions to your property unless they’re required by the local building codes.

SBA loans have terms of up to 30 years. During the first 12 months, interest won’t accrue and you won’t be required to make payments. Interest rates are capped at 4% for those who can’t receive credit elsewhere, or 8% for those who qualify to borrow money from another source.

Other ways to pay for damage insurance won’t cover

If you need to pay out of pocket for damage that’s not covered by insurance or disaster grants, some options include:

• State and local resources: You can contact your state or local division of emergency management to see what resources are available to you. For immediate needs — like if you need shelter because your home is flooded — you can call the United Way’s 211 helpline.

• 0% APR credit card: Some credit cards offer a temporary 0% APR on new purchases and/or balance transfers for anywhere from 12 to 21 months, which can be helpful when you need to pay out of pocket for repairs. If you go this route, try to pay off as much of the balance as possible before interest starts to accrue.

• Personal loans: A personal loan is an up-front sum that you borrow and pay back in fixed monthly installments. You can use most personal loans for virtually any expense, including home repairs. Though interest will begin accruing immediately, rates are usually lower than credit card interest rates.

How to prepare for floods and other disasters

It’s essential to buy home insurance and flood insurance — even if you’re not required to by a lender. You may think that flood insurance is unnecessary if you don’t live somewhere that’s prone to flooding, like Florida. But 40% of flood insurance claims since 1998 came from areas that aren’t at risk of flooding. The devastation in North Carolina serves as a reminder that floods can happen anywhere.

You can usually buy an NFIP policy through your regular insurance company or insurance agent. You can also use FloodSmart.gov to find an insurance provider in your area.

Don’t wait until next hurricane season to apply for coverage, though. Unless you’re buying a home, a 30-day waiting period usually applies before the flood insurance policy goes into effect.

FAQs

Do FEMA grants have to be paid back?

No, because FEMA individual disaster assistance is a grant, not a loan, you won’t have to repay the funds.

How much FEMA disaster relief will I get?

The maximum individual FEMA disaster grant is $42,500 for housing assistance and $42,500 for other needs assistance in 2024. However, the average payout is much lower. Between 2016 to 2022, the average FEMA grant was about $3,000.

How does FEMA work for flood victims?

Flood victims may be able to get assistance from FEMA for disaster-related expenses that aren’t covered by insurance, including home repairs, replacing personal property, and temporary housing. FEMA assistance for flood victims isn’t a replacement for flood insurance, and payouts are typically just a fraction of what you’d get from a flood policy.