Flood Insurance, Public Aid Leave Gaps for Midwest Disaster Victims Looking to Rebuild

By Dennis Conrad | June 27, 2008

With federal aid limited and most homes damaged or destroyed by Midwest flooding lacking the proper insurance, states along the Ohio and Mississippi rivers will soon have to help homeowners recover, according to the nation’s No. 1 disaster official.

“There’s a big gap that they are going to have as people get back to rebuild their homes,” R. David Paulison, director of the Federal Emergency Management Agency, said after meeting at the Capitol with some members of Illinois’ congressional delegation.

Homeowners with flood insurance may receive up to $250,000 to help with rebuilding and up to $100,000 for financing. Those eligible for federal assistance may get only up to $28,800.

“About 600 homes have either been heavily damaged or destroyed” in Illinois, Paulison said. “We haven’t been in every county yet, so I suspect that number will probably rise.”

FEMA, Congress and the states will be “struggling” to determine how to help, Paulison said.

U.S. Sen. Dick Durbin, the delegation’s leader and the Senate’s second-highest Democrat, said the insurance problem is a familiar one to Illinoisans affected by floods, particularly those in low-lying areas struck hard by the 1993 floodwaters. Ultimately, many of those people moved elsewhere.

“People have to understand a modest investment in flood insurance is probably the smartest way” to avoid problems, he said.

At their joint news briefing, Durbin and Paulison heaped heavy praise on all agencies — federal, state and local — in dealing with the flooding, from preparedness to the work at hand.

Paulison reported that FEMA is assessing damage in around a dozen counties to determine if flood victims will be eligible for individual assistance of up to $28,800 for those who were underinsured or did not have insurance. A few days later similar assessments will take place for public buildings — local, state and federal, from courthouses to firehouses — to gauge their needs.

President Bush issued a federal disaster declaration on Tuesday that covers 13 of 24 counties that have been declared state disaster areas. But that declaration does not provide financial help for individuals or public buildings, just to reimburse the state for things like food, water and sandbags.

FEMA is still weighing what to do with a request from Illinois, as well as Wisconsin, Iowa and Indiana, for the federal government to increase the share of its contribution to deal with flood-related costs. Under federal law, FEMA provides 75 percent and states 25 percent, but under certain circumstances the federal share may increase to 90 percent, with the president’s approval.

“We don’t have the totals of the damages yet, so we have to hold that for a period of time, to see exactly how much damage they have, what’s the cost to the state and is it overwhelming,” Paulison said.

FEMA has applied lessons learned from its response to Hurricane Katrina in 2005 to the flooding, Paulison said.

Before the current disaster, he said, FEMA developed partnerships with governments and the private sector, such as one that led to Wal-Mart supplying a half million liters of water.

“Instead of doing everything ourselves, we develop partnerships and have these contracts in place ahead of time so we can don’t end up like Katrina, where we’re trying to negotiate contracts in the middle of a disaster,” he said.

Members of the state’s congressional delegation have scheduled a meeting with Agriculture Secretary Ed Schafer to discuss flood-related issues and further assistance.

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