When the President of the United States declares a natural disaster, the federal response is authorized by the Robert T. Stafford Disaster Relief and Emergency Assistance Act (Public Law 93-288), passed by Congress in 1988. This Act constitutes the statutory authority for most Federal disaster response activities especially as they pertain to FEMA and FEMA programs. The rules that FEMA follows are codified in Title 44 of the Code of Federal Regulations (CFR). FEMA also issues policies in support of both the Stafford Act and 44 CFR. These are referred to as the 9500 Series Policy Publications.

When a disaster is declared, the State in which the disaster is declared (or in rarer instances, a federally recognized North American Indian Tribal government) acts as the grantee. State government agencies, local governments and special districts, and eligible public non-profit agencies are then sub-grantees to the State.

As a condition of the FEMA grant, 44 CFR requires the grantee or sub-grantee is required to obtain and maintain insurance coverage on damaged buildings, contents, vehicles, and equipment in an amount equal to the damages. This requirement remains in place for the life of the property in question. Coverage for perils other than flood (primarily wind) is not generally an issue. Coverage for flood damage, however, has proven to be difficult. Coverage must be at least as broad as that provided by the standard National Flood Insurance (NFIP) policy.

The maximum limit available from NFIP is $500,000 per building and a separate $500,000 for contents of said building. If the eligible damages exceed $500,000 for either the building or its contents, the grantee or sub-grantee must secure higher limits from the private insurance marketplace. The exception to this is if the grantee or sub-grantee can obtain a letter from the State Insurance Commissioner certifying that such coverage is not reasonably available.

In a Second Appeal decision dated February 15, 2012, FEMA ruled the City of Snoqualmie, WA could not use flood insurance coverage from their pool, Washington Cities Insurance Authority (WCIA), to meet the insurance requirement of the FEMA grant as required by 44 CFR §206.252.


  • Coverage: Following form excess flood insurance
  • Underlying form: NFIP Standard Flood Policy
  • Locations covered: Scheduled
  • Limits: Scheduled, per location with separate limit for building and contents
  • Underlying Limits: $500,000 per building, $500,000 per location contents
  • Valuation: ACV


  • Schedule of locations to be insured, including address
  • Amounts to be insured in excess of $500,000 per location
  • Flood zone of insured location
  • Copy of underlying NFIP application
  • Copy of underlying NFIP policy


When damages exceed 50% of the building value, FEMA will pay to replace the entire building. While the actual damages could be less, FEMA will require insurance coverage for the full value of the building.

When a building is to be replaced, instead of repaired, FEMA will require the new facility to be built outside the 100-year floodplain.

When a building is repaired, FEMA may authorize additional funds to mitigate against future damage.

Claim adjustment will need to be necessary. It is not uncommon for a NFIP adjuster to stop his loss calculations once the NFIP policy limit is exceeded. It may be best to contract with the NFIP assigned adjuster to have that person adjust the entire loss.

Since coverage is being written to meet FEMA grant requirements, information on the availability of coverage can be sent to each of the ten FEMA regional offices as well as the Emergency Management Director of each state so they are aware the program.