Missouri federal disaster declaration highlights coverage gaps

A major disaster declaration was approved following severe weather and flooding, but many residents rely too heavily on this form of compensation

Insurance News


The approval of a major disaster declaration for Missouri affords another opportunity to rethink risk management of severe weather events.

President Barack Obama approved the measure Sunday, which will offer assistance programs to residents of 33 Missouri counties that were damaged by heavy rains and flooding in late December and early January. Eligible recipients must document any losses through photos, receipts and other means in order to receive federal funds.

Governor Jay Nixon, who had declared a state of emergency on December 27, said the impact of the storms “continues to be felt in communities across the state” and that the federal declaration will help affected residents and businesses recover.

Such federal assistance is a poor excuse for forgoing flood and other forms of insurance, however – a choice that increasing numbers of residents in disaster-prone areas are making.

“Federal disaster assistance typically is a low interest loan that helps cover damage costs, and not compensation for your losses,” explained Ron DeFreitas, owner of Gulf Coast Educators Insurance. “Additionally, those loans are only available if the President formally declares a disaster and it must be repaid.”

Despite the fact floods are the most common natural disaster in the US, many homeowners do not understand what is, or isn’t covered under their policies.

Personal liability kicks in if an individual’s standard homeowner insurance policy does not cover damage from heavy rains as a result of flooding from a related weather event. Therefore leaving people responsible for covering the entirety of the cost for damages, exacerbating the risk for financial hardship.  

Additionally, homeowners are unaware if they need flood insurance when they live in a low-risk flood zone area. Providers should remind them that even though insurance is not federally mandated, 25% of all National Flood Insurance Program claims are from people mapped outside of high-flood risk areas, according to Floodsmart.gov.

Flood risk is subject to changes based on natural developments, environmental fluctuations and infrastructure advancements.

In Missouri, the deadline for individual assistance programs is 60 days after the disaster declaration. Assessments are continuing to determine the damage to public infrastructure and flood-related emergency response costs in the state.

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