Question: My car or truck is flooded, but my insurance doesn’t cover flood damage. What are my options for Federal Assistance?
In terms of Federal Assistance, you have two primary options:
- A loan through the Small Business Administration (“SBA”)
- A Grant from FEMA
As an initial matter, you will need register and apply for individual aid with FEMA. This can be done at DisasterAssistance.gov. Please note that you have 60 days from the date of the declaration (i.e. 60 days from August 25, 2017) to apply for individual assistance.
As part of this process you should receive a FEMA Registration ID. If you did not receive an ID number, you should call 1-800-621-3362 because you will need this number to apply for an SBA loan.
Option 1: SBA Loan Process
I will first discuss the personal property loan process through the Small Business Administration (SBA). I will address this option first because to be eligible for the second option you must first apply for and be denied an SBA loan (or show that an SBA loan would be inadequate).
You do not have to own a business to be eligible for a SBA loan.
However, you do have to live in an area that has been declared a Federal disaster area. For Hurricane Harvey this means the following counties:
- Fort Bend
- San Jacinto
- San Patricio
The simplest way to apply for the loan is online, which can be done here. In order to apply online, you will need to register and setup an account. You will then need to complete the loan application. Some of the information you will need for the loan application can be found here, which is a link to the home loan application.
The general information sought for the home loan and the personal property loan is similar. Once you have completed the application, you will need to sign and submit the same, as well as the completed and signed IRS Form 4506-T, to the SBA.
Once this is completed, you may be asked for additional information including a recent pay stub (must be within the last month) and/or your complete tax returns. If this information is requested, you will be expected to provide the same within 7 days. Also, you will likely be visited by an SBA inspector to estimate the cost of your damage.
If you are approved for a loan, the maximum amount you could receive for personal property is $40,000.00. These loans are beneficial because, generally speaking, SBA loans have a longer repayment term and a lower interest rate.
Option 2: A FEMA Grant
If you do not have automobile insurance coverage for a flooded vehicle and you cannot obtain a SBA loan, you may be eligible for a FEMA grant to help you repair or replace your vehicle. Again, you must show that your loss is as a result of the disaster. You will also likely be required to show that the vehicle is registered in your name or your dependent’s name and “the vehicle is insured and conforms to State laws.”
If you qualify for a FEMA grant, in Texas the “the maximum transportation allowance for repair is $550 up to $7,000 per serious need vehicle. The maximum replacement value cannot exceed $7,000.” Here is a link that discusses some of the other eligibility requirements.
If you are reading this and know of any other resources that provide assistance to those affected by Hurricane Harvey, please let us know so that we might post the same.