Chapter 8 › X. Requirement to Obtain and Maintain Insurance

Do we have to insure facilities FEMA helps repair?

FEMA term

Requirement to obtain and maintain insurance

Short answer

Yes. For permanent work on insurable buildings, contents, equipment and vehicles, you must obtain and keep insurance against the hazard that caused the damage, in an amount based on eligible costs before reductions. If you don’t, FEMA denies or deobligates the funds and the facility is ineligible in future disasters.

What FEMA requires

The requirement is waived when eligible costs for the insurable facility are $5,000 or less.
It applies to improved and alternate projects too, for the life of the work or the facility, whichever is shorter.
FEMA can modify the requirement if coverage isn’t reasonably available and isn’t necessary; it won’t require more than the state insurance commissioner certifies as reasonable.
Commercial policies, blanket policies, flood policies, pools or approved self-insurance can satisfy it.
If you can’t insure yet (for example, during reconstruction), a letter of commitment holds the project until proof of coverage.

Documentation

Proof of coverage by type and amount, or a letter of commitment. See FEMA Recovery Policy FP 206-086-1.

Watch out · Govstar practitioner advice

Track obtain-and-maintain obligations in a register by facility and disaster. A lapse years later can claw back old funding and bar future help.

Govstar summarizes FEMA’s Public Assistance Program and Policy Guide in plain language and links to the official text. Govstar is independent and not affiliated with FEMA. This is general guidance, not legal advice.