Paige Cerulli Last Updated On: September 7, 2023

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Rebuilding After Hurricane Idalia

When Hurricane Idalia swept through Florida, it caused devastation and tragedy. The hurricane heavily impacted the state, causing flooding and at the deaths of at least two motorists who were caught in the heavy rain preceding the hurricane. Countless homes and businesses were damaged or destroyed, and the extent of the damage is still being assessed.

Natural disasters like Hurricane Idalia seem to occur all too often. Seeing the extensive damage caused, you might wonder what would happen if a disaster struck your state and impacted your home. Here’s what you need to know about the rebuilding process.  

What Will Your Home Insurance Cover?

The type of home insurance coverage that you have will impact how you’re able to rebuild after a natural disaster, like a hurricane or earthquake.

For example, many home insurance policies don’t include flood insurance, and you will need to purchase either an endorsement or a separate flood insurance policy.

If your insurance covers the type of natural disaster you experienced, then you will need to file a claim and pay your deductible before the policy will pay for repairs to or the replacement of your home. The amount of money that you receive will depend on the extent of the damage and your home’s value.

What If You’re Not Insured for the Damage Caused?

If the type of event that damaged your home isn’t covered by your home insurance policy, you can still get funds to help you repair or rebuild the home. Federal grants and loans are available specifically for these types of situations.

FEMA Individuals and Households Program

The FEMA Individuals and Households Program provides grants to owners of homes that are located in a federally recognized disaster area, including areas that have flooded. Grants can be as large as $33,000, but are typically much smaller, and are designed to help you quickly fix your home so that you can live in it again. The money you receive can help to make your home livable, but it won’t be enough to fully return your home to its condition before the disaster.

Small Business Administration Disaster Loans

The Small Business Administration also offers homeowners disaster loans that you can use to repair or replace your home, as well as to replace other items like cars and furniture. Loans to repair or replace your home are available for up to $200,000, while loans to replace personal property have a limit of $40,000.

These loans have low interest rates and can have long repayment periods, meaning you’ll get the money you need to restore your home right away and then can take time to gradually repay the loan.

Where Can You Get Additional Help?

Even if your home insurance covers the replacement of your house, you may have immediate needs, like temporary housing or meals, that the insurance doesn’t cover.

After natural disasters, there are often initially multiple agencies available to help you. To start, contact your local FEMA office and ask about the types of help that are available. Even if FEMA doesn’t offer the type of help you need, they may be able to network and help you find assistance from another group that’s present.

How Does a Natural Disaster Impact Your Future Home Insurance Costs?

Knowing that your home insurance will help you rebuild after a natural disaster is reassuring, but you could see an increase in your home insurance rates after a disaster occurs. Insurance companies buy their own kind of insurance, called reinsurance, to help minimize the costs that occur when they need to pay out claims. If a natural disaster occurs and the insurance company has to pay out many claims, that company will also file a claim with its reinsurance to help cover that financial loss.

In turn, the insurance company will pay more for future reinsurance, and the company will increase home insurance premiums to help pay for that extra cost. Insurance companies may raise rates for all of their customers, but rate increases may be steepest in areas that are prone to natural disasters.

The recent increased prevalence of natural disasters is already having a significant impact on the insurance industry. According to the National Centers for Environmental Information (NCEI), since 1980, the United States has experienced 363 weather and climate disasters that resulted in damages of or more than $1 billion per incident. The total cost of damages caused by these events is more than $2.590 trillion. And, in 2023 alone, there have already been 15 weather or climate disasters with losses of more than $1 billion each.

That NCEI data highlights how prevalent these major disasters are, as well as the financial impact they have on the economy and on home insurance companies. In response to these disasters, some insurance companies will raise rates. Alternatively, in May 2023, State Farm stopped accepting home insurance applications in California because of wildfires and steep construction costs.

Looking Forward

Natural disasters occur all too often, and if they continue to cause extensive and frequent damage, we’re likely to see home insurance rates continue to rise. If you want to ensure you’re protected in case of a natural disaster, then it’s a good idea to review your home insurance policy and verify that your coverage protects you against flooding and other events. Investing in flood insurance, if you don’t already have it, can give you additional peace of mind, knowing that you’re protected in case a disaster strikes. 

Paige Cerulli Paige Cerulli is a freelance content writer and journalist who specializes in personal finance topics. She graduated from Westfield State University and brings more than a decade of professional writing experience to the ConsumerCoverage team. Paige’s work has appeared in outlets including USA Today, Business Insider, and more.

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