After a big disaster like a hurricane, there is usually a ton of money trying to make its way to survivors and help rebuild their lives. One of the most important tools to recovering from a disaster is getting a payout on an insurance policy. However, people often don’t realize that they can accidentally get in trouble for double dipping with insurance and FEMA money. Here are five things that you need to know when trying to follow the rules:

#1: FEMA Reviews Everything on a Case-by-Case Basis
When it comes down to it, FEMA reviews applications on a case-by-case basis so that everyone gets the right amount type of assistance. This means FEMA is going to take a look at: what you need, versus what insurance or assistance you already have coming your way, to figure out how they can help best. FEMA isn’t perfect and may get something wrong along the way. If you feel that there is something wrong, there is an appeal process to make things right. It’s all about preventing fraud and abuse of the system meant to help people.

#2: Insurance Has to be Your Starting Point
FEMA money is meant to help with expenses after a disaster that you can’t meet in other ways. Thus, you have to at least file a claim with your insurance company to try and get the damage covered. You usually can’t get both an insurance payout and a FEMA payout for the same demolished home, though there are a couple exceptions.
The two biggest exceptions are that: (#1) FEMA can help with covering the cost of damage or losses when you don’t have enough insurance; and (#2) FEMA can provide somewhat of a loan if there is a big delay with your insurance policy’s payout.

#3: One Household, One Application, One Payment…Usually
An issue arises when you have multiple adults living under the same roof, like roommates. FEMA keeps the roommate situation in mind for making assistance payments on things like personal property, medicine, and medical procedures. However, FEMA usually gives payments for rental assistance to the first roommate who applies, unless there is a good reason not to. The idea is that FEMA expects everyone to stay together during the recovery process, but sometimes that’s not the case. Bottom line: if you have more than one application being filed at your address, pay attention to who is getting money and why so FEMA doesn’t come asking for it back.

#4: FEMA Can Take Their Money Back
Everyone has their eye on government spending. Thus, FEMA is very careful during a disaster for fraud or someone trying to take advantage of the situation. Even if FEMA pays someone accidentally, they have a right to take the money back. Also, if you don’t use the money properly, they can take it back. This can happen when someone does something like using FEMA’s rental assistance money for a car loan payment. This isn’t a hard and fast rule though. Going back to #1, if there’s a reason FEMA shouldn’t take the money back; you can ask them not to in the form of an appeal. Don’t worry, we talk about appeals in a separate blog because they’re a little complex.

#5: There is a True Limit to How Much FEMA Can Help
A big myth during disasters is that FEMA gives tons of money to people. However, it’s only a half-truth. The fact is that FEMA does give a lot of money to help people, but there’s a true limit. In Fiscal Year 2017, the limit was $33,000 her household, and adjusts slightly each year. Don’t get your hopes up though, the average payout is around $7,000-$8,000 per household. There are various exceptions to this total assistance limit, though. Be sure to ask the team at the disaster recovery center what assistance does and does not apply to the cap.


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The Allen Firm, PC is composed of a team of attorneys located in Stephenville, Texas. Our mission is to improve people’s lives by providing reliable and practical help with their legal matters while operating under our values of honoring people, operating with integrity and striving for excellence. We offer help in forming businesses or companies, estate planning, lawsuits, real estate, probate, oil and gas, collections, agriculture, bankruptcy, family law, and accident and injuries.


*This article has been written and provided for educational purposes in an attempt to provide the reader with a general understanding of the particular topic and area of law covered in this Article.  It is not to be relied upon for any purpose.  The reader acknowledges the underlying analysis and legal conclusions referenced in this Article may be inaccurate by the changing of the law or by a controlling court opinion to the contrary.  No attorney-client relationship exists until an appropriate engagement letter has been signed. Contact our Firm to discuss how the contents of this Article may apply to your specific situation.

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