When Disaster Strikes
Federal agencies are ready to provide assistance for the victims of hurricanes and other catastrophes, but there is a process to receive the aid.
A natural disaster can destroy everything in its path.
While the U.S. government stands ready to assist states, localities, and tribes after a catastrophe, such an event does not automatically trigger federal assistance.
The scope of this danger has been made clear again after hurricanes Helene and Milton struck the eastern United States, killing hundreds and devastating entire communities. As of mid-October, Verisk’s Extreme Event Solutions division projected insured losses from Helene at between $6 billion and $11 billion, particularly citing damage from flooding in the Carolinas. The data analytics firm’s number for Milton was far higher—an estimate of $30 billion to $50 billion in insured onshore property losses, primarily due to wind, after the hurricane made landfall in Florida.
Typically, federal disaster funding involves several key steps and programs. First, a governor requests federal assistance when local and state resources are overwhelmed, then the president must declare a disaster to trigger federal aid. (This does not apply to state National Guard units, which can be deployed by the governor.)
The Federal Emergency Management Agency (FEMA) coordinates disaster response and recovery. Once a federal disaster is declared, FEMA can begin to work with state officials to assess the situation. This same process would apply to tribal governments.
Federal funding can come from various programs including Public Assistance (PA), which is grant money for state, local, territorial, and tribal governments to repair public infrastructure and provide emergency protective measures. Individual Assistance (IA) is money for individuals and households to pay for needs including temporary housing, home repairs, and other expenses related to the event.
FEMA allocates funds based on assessed needs, and states must submit applications for funding, usually done through the state’s department of emergency management. Tribal governments, as autonomous entities, would file their own applications. Large municipalities such as New York City would also largely prepare their own submission, even if it is ultimately filed through the state. There may be matching requirements, meaning applicants need to contribute a portion of the funding.
The U.S. Small Business Administration (SBA) also provides disaster aid targeted for small businesses, homeowners, renters, and nonprofit organizations. The SBA’s disaster assistance programs include a physical damage loan to help repair or replace damaged property, equipment and inventory, and an economic injury disaster loan to help businesses that are unable to meet financial obligations. Businesses can apply for both loans and receive a maximum of $2 million.
The SBA also provides counseling and support services for small businesses and it can partner with local nonprofits to offer grants or additional resources.
To access SBA disaster assistance, businesses typically must apply within a specific time frame following a disaster declaration. The application can be submitted through the SBA website.
Once FEMA and/or SBA funds are disbursed, recipients must adhere to specific guidelines and reporting requirements to ensure proper use of the money. This process can last for several years past the initial funding date. After immediate response efforts, federal funding can also support long-term recovery through initiatives such as FEMA’s Hazard Mitigation Grant Program. The goal of the federal government is to collaborate with state and local agencies to provide timely assistance while ensuring accountability and oversight of federal funds.
