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Swannanoa resident Lucy Bickers, who received assistance from FEMA after Hurricane Helene damaged her property, holds a sign in support of the government disaster agency as she waits on the route of visiting U.S. President Donald Trump\u2019s motorcade in Swannanoa, North Carolina, U.S., January 24, 2025.\u00a0<\/p>\n
Jonathan Drake | Reuters<\/p>\n<\/div>\n<\/div>\n<\/div>\n
As the Trump administration moves to wind down the Federal Emergency Management Agency<\/a>, changes could make it harder for homeowners to recover from a natural disaster<\/a>, experts say.<\/p>\n That underscores a point insurance experts make: FEMA provides aid for states and individuals in the event of a federally declared natural disaster, but it\u2019s not meant to replace your home insurance policy<\/a>, according to Charles Nyce, a risk management and insurance professor at Florida State University.<\/p>\n \u201cThere\u2019s a lot of different things that FEMA does really well, but one of the things they\u2019re not designed for is to be a replacement for insurance coverage for individuals,\u201d said Nyce.<\/p>\n<\/div>\n President Donald Trump said in a June 10 press briefing<\/a> that he plans to \u201cstart phasing [FEMA] out<\/a>\u201d after this year\u2019s hurricane season, which spans from June 1 to November 30.<\/p>\n Trump also said the administration would \u201cgive out less money\u201d in disaster aid to states and \u201cgive it out directly\u201d from the president\u2019s office: \u201cWe\u2019re going to do it much differently.\u201d\u00a0<\/p>\n More from Personal Finance:<\/strong> \u201cOver the next couple of months, we\u2019ll be working on reforms and what FEMA will look like in the future as a different agency as under the Department of Homeland Security,\u201d DHS Secretary Kristi Noem said in the briefing.<\/p>\n Asked about the potential changes, a FEMA spokesperson told CNBC that the agency is \u201claser focused\u201d on disaster response for this hurricane season and \u201cprotecting the American people.\u201d<\/p>\n The Department of Homeland Security proposed to cut $646 million from FEMA\u2019s budget for fiscal year 2026, according<\/a> to a May letter from the Office of Management and Budget. In April, FEMA announced it was ending<\/a> a disaster prevention and mitigation grant program, returning $882 million in funding to the Treasury.<\/p>\n Such actions are \u201creckless,\u201d Sen. Raphael Warnock, D-G.A. wrote in a June 5 letter<\/a> to Noem.<\/p>\n The administration and DHS \u201chave haphazardly and irresponsibly worked to dismantle the nation\u2019s lead disaster response agency without any workable alternative or sense of direction,\u201d he wrote.<\/p>\n<\/div>\n It puts more of an onus on citizens to be prepared.<\/p>\n Charles Nyce<\/p>\n a risk management and insurance professor at Florida State University<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/blockquote>\n \u201cFEMA is not going to be able to operate in the same way that it has in the past,\u201d said Jeremy Porter, head of climate implications at First Street Foundation, a nonprofit research organization focused on climate risk.<\/p>\n He and other experts say that the administration\u2019s proposed changes would put more responsibility on states and municipalities to come up with the financial resources to help individuals recover from natural disasters.<\/p>\n<\/div>\n While FEMA provides grants <\/a>and resources to help individuals and municipalities recover from federally declared disasters, the aid is designed to be a supplement for something that\u2019s not covered by your homeowners insurance policy, Nyce said.<\/p>\n The way the agency provides aid to individual homeowners is by giving small grants available for uninsured losses, Nyce said. The money can be used to cover temporary housing for a day or week, for example.<\/p>\n The average payout for individual assistance grants through FEMA was $3,522 from 2010 to 2019, according <\/a>to a 2024 report by the Brookings Institution, a non-partisan think tank in Washington, D.C.<\/p>\n<\/div>\n The agency also offers disaster loans<\/a> with low interest rates through the Small Business Association, which cover losses not covered by insurance, grants or other resources. According to a FEMA release<\/a> from earlier this month, interest rates can be as low as 2.688% for homeowners and renters, 4% for businesses and 3.25% for nonprofit organizations, with terms of up to 30 years.<\/p>\n \u201cThey\u2019re really designed as a way for people just to have enough money to figure out what their next steps are,\u201d Porter said.<\/p>\n Typically, FEMA will assist a state\u2019s emergency management agency after a disaster, said Nyce. But now, the expectation is that states will take on a large role in disaster recovery.<\/p>\n \u201cWith cuts at the federal level for disaster recovery, it\u2019s going to put more of a financial burden on the states to enable recovery,\u201d Nyce said.<\/p>\n<\/div>\n It\u2019s uncertain how much and what kind of FEMA natural disaster aid will be available for individuals after the agency goes through changes, experts say.<\/p>\n \u201cIt puts more of an onus on citizens to be prepared,\u201d Nyce said.<\/p>\n One way to do that is by taking a closer look<\/a> at your home insurance coverage. See if you need to make changes to your policy \u2014 you want to avoid being underinsured, or risk your insurer paying less than the full claim. You might also need additional coverage, such as flood insurance<\/a>.<\/p>\n<\/div>\n Make sure you have enough supplies to \u201cfend for yourself for a day or two, or three,\u201d Nyce said. That includes dry food, batteries, water and a radio. It\u2019s also smart to collect key financial documents<\/a> to store in a safe place.<\/p>\n Additionally, if officials in your area are advising residents to evacuate in the face of a disaster, you may want to consider doing so rather than trying to shelter in place at home, he said.\u00a0<\/p>\nHow FEMA could change<\/h2>\n
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What kinds of aid FEMA provides<\/h2>\n
\u2018More of an onus on citizens to be prepared\u2019<\/h2>\n