The Federal Emergency Management Agency, or FEMA, coordinates within the federal government to provide assistance before, during and after disasters. Although FEMA offers information and tools to be proactive and prepare for potential disasters, it is widely known for its assistance after a disaster has occurred, such as a flood, hurricane, earthquake, tornado or wildfire. FEMA provides support to states, tribal nations and territories after a presidential disaster declaration has been received.
The future of FEMA is currently being discussed by a council that has been appointed to reform it rather than permanently end it. Potential changes include raising the threshold for disaster declarations and updating the split that is shared between federal and state or local governments. Presidential disaster declarations are no longer guaranteed and could be denied in a future disaster. These changes could lead to a reduction in future FEMA reimbursements.
Local governments use FEMA assistance to bridge the gap between insurance coverage and the total cost of recovery. FEMA can cover costs that a primary insurer would not cover because of policy limits or exclusions.
Members of the SC Municipal Insurance and Risk Financing Fund have requested reimbursement from FEMA after declared disasters in South Carolina, including the most recent event, Hurricane Helene. Many members requested reimbursement for items that were denied by SCMIRF because they were not on the member’s inland marine schedule — items like streetlights, traffic signals, playground equipment, portable generators, fencing, signage and lighting.
Risk Management Services strongly encourages SCMIRF members to review their insurance schedules throughout the year, but they should also make an extra effort to do so during the renewal period. This can ensure that inland marine items are scheduled and the member can be reimbursed for damages under their property and liability coverage, rather than having to submit documentation to FEMA after a disaster occurs.
Members can log onto the policy portal to review their current inland marine schedule and submit an endorsement to add any items that are currently not scheduled.
There are also other insurance products available outside of SCMIRF coverage that may help address any gaps between SCMIRF coverage and FEMA reimbursements.
Contact RMS Underwriting staff at policy@masc.sc with any questions regarding updating an inland marine schedule and questions regarding insurance coverage.