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Main story: Recovering from Hurricane Floyd
AND: Damage by the numbers
Helping hands are welcome, but they can
be maddeningly frustrating to deal with


Life in the aftermath of FloydIn the aftermath of a hurricane or an earthquake, help will come. But it can be a trial grasping its extended hand when you are all but wiped out.

When the president declares a federal major disaster, two agencies take the lead in providing aid to homeowners and renters who are uninsured or underinsured: the Federal Emergency Management Agency and the Small Business Administration.

And there are plenty of people without adequate insurance: standard homeowners' and renters' policies don't cover damage caused by floods or earthquakes. In hurricane-prone states, standard homeowners' and renters' policies don't cover all windstorm damage.

Even if you're covered, your policy might not replace all your losses. FEMA and SBA can fill the gaps.

Agency confusion
Disaster survivors often find the agencies' procedures frustrating and confusing. Most victims understand the difference between grants and loans -- you have to repay loans, but not grants -- but they are flummoxed by the fact that you fill out an SBA loan application to get a FEMA grant.

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Many disaster victims are surprised by the extent of the Small Business Administration's role because the agency's name is misleading. Despite its moniker, the Small Business Administration helps homeowners and renters as well as businesses recover from disasters. The SBA, not FEMA, distributes low-interest loans to homeowners and renters for permanent repairs.

Who does what
Of course, the SBA lends money to damaged businesses, too. Businesses cannot get grants.

FEMA hands out grants to pay for temporary and permanent housing repairs, for rent while homes are being repaired and for replacing some kinds of personal property.

Because you have to fill out just one application for SBA loans and FEMA grants, the government gets brownie points for streamlining the process. But many people are confused when they are told to fill out an SBA loan application so they can get a grant from FEMA.

The federal government takes the position that homeowners and renters should pay what they can afford. So people are given loan applications, and if they don't qualify for an SBA loan because of inability to repay, they might qualify for a FEMA grant.

Related information:
Protecting yourself before and after disaster

-- Posted: Nov. 16, 1999

 

 
 
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