Public Assistance Policy on Insurance

Policy Overview

Purpose: Guides decision making and interprets statutes and regulations related to insurance requirements under FEMA's Public Assistance program.

Scope: Applies to major disasters declared on or after the date of publication.

Authority: Robert T. Stafford Disaster Relief and Emergency Assistance Act, Sections 102, 311, 312, 406, 422, and 428.

Part 1: Insurance Requirements

Obtain and Maintain

When FEMA provides assistance for permanent work to replace, restore, or repair a facility, the applicant must insure that facility against future loss. Applicants must comply with this as a condition of receiving assistance.

• Applied to buildings, contents, equipment, and vehicles.
• Not required for temporary facilities.
• Not required if eligible costs are less than $5,000.

Modifying the Insurance Requirement

Applicants may request a modification if they believe insurance is not reasonably available, an alternative provides adequate protection, or insurance is not necessary.

State Insurance Commissioner Certifications

FEMA will not require greater types and amounts of insurance than are certified as reasonably available, adequate, or necessary by the appropriate State insurance commissioner.

Compliance and Consequences

Proof of Insurance: Applicants must provide proof of insurance to document their commitment. FEMA and the recipient verify this prior to grant closeout.

Part 2: Duplication of Benefits & SFHA

Duplication of Benefits

FEMA cannot duplicate benefits from other sources. Assistance is reduced by the amount of actual or anticipated insurance proceeds.

Special Flood Hazard Areas (SFHA)

For flood-damaged properties in an SFHA that are uninsured, FEMA reduces assistance by the maximum amount that a Standard Flood Insurance Policy would provide.