Helping Hoosiers Recover from Disasters
The Indiana State Disaster Relief Fund (SDRF) serves Hoosiers in times of disaster, when personal insurance and federal subsidies are unavailable or do not apply. Like in most states, the SDRF helps to streamline funding to needy residents looking to recover from disaster or weather events, which are becoming more severe and frequent across the country.
Additionally, the cost for communities to recover from disasters also has spiked considerably. Assistance from the Federal Emergency Management Agency (FEMA) is not always a guarantee, and states today are learning to better prepare for handling disaster and recovery costs at a more local level.
Since 2003, SDRF has grown and expanded to become a strong tool to help residents and local governments when they need it the most. Also, IDHS works closely with communities to support mitigation initiatives that lower the costs and risks of disaster damage.
Despite a strong SDRF in Indiana, the funding is not sufficient to help everyone at a level to replace and restore all losses in a disaster. As of July 1, 2024, the maximum payout for the SDRF to individuals is $25,000. Insurance remains the primary (and best) way Hoosiers can protect themselves in times of disaster. Insurance, including flood and earthquake insurance, is the best investment to ensure individuals can become "nearly whole" again following a disaster.
The SDRF, either through Individual Assistance or Public Assistance, is designed to assist in the recovery process. It is not intended to make a person or entity whole, nor be a replacement for insurance coverage. For qualifying local governments, the SDRF can help with repairing public roads and bridges, reimbursing some response costs or helping to clear debris to make roadways passable again.
SDRF Changes: Improving Access to State Aid
Disasters are becoming more prevalent nationwide, and federal assistance formulas have been adjusted to raise the threshold that each state must meet for local disasters to qualify for federal aid. In short, it is harder than ever to meet federal thresholds for a federal disaster declaration and funding and resource assistance from FEMA.
States are learning to be more self-sufficient. Legislation in 2024 made improvements to Indiana's SDRF program (effective July 1, 2024) that made accessing aid quicker and simpler for Hoosiers navigating the recovery process post-disaster. Additional changes will come as Indiana Administrative Code Title 290 is updated.
In general, the 2024 law changed how the SDRF can be used. It changed the requirements for an eligible entity to receive money from the fund and simplified the calculations used to determine how much an eligible entity may receive. It also increased the maximum award for individual assistance to a maximum of $25,000. Equally important, the new legislation removed the requirement that the U.S. Small Business Administration declare a local disaster, allowing SDRF funding to flow more quickly and directly to those who are eligible. This also makes it easier for public entities, such as municipalities and counties, to apply, because the state criteria can be used instead of federal criteria.
Frequently Asked Questions
- Why is it harder for Indiana to obtain federal disaster aid?
- How does Indiana's disaster funding work?
- Will the increased maximum award amounts risk draining the fund?
- How is a federal disaster declared?
- How is a local disaster declared?
- How much does it cost annually for the country to respond to disasters?
Get Prepared: The Need for Insurance
Insurance is crucial to recovering from a disaster. The state of Indiana strongly encourages all Hoosiers to buy insurance to reduce the risk of financial hardships that can arise from the damage and destruction to homes and possessions. Insurance policies can cover much of the cost to repair or replace property, but both state and federal assistance programs only offer limited financial help where insurance falls short.
The average homeowners insurance policy may cost as little as about $1,000 a year yet save thousands, or hundreds of thousands of dollars, when disaster strikes. The median home value in Indiana is about $184,000, according to Indiana Housing and Community Development Authority, and a typical homeowners insurance policy would cover much of the cost to repair or replace the home. However, the maximum assistance that the SDRF could provide is $25,000 ($10,000 prior to July 1, 2024).
The SDRF can be especially helpful where insurance coverage ends. For example, the cost to remove a single large fallen tree could be more than $10,000. An insurance policy might only cover a maximum of $500 for all debris removal, so a homeowner would have to pay out of pocket for the remaining cost to remove the tree. The SDRF could be used to alleviate some of that burden.
Homeowners and Renters Insurance
Homeowners insurance policies cover your family's personal belongings, your home and the contents of your home, such as furniture, appliances and clothing. Renters insurance is very similar to homeowners insurance, except the dwelling structure is not covered. However, if you rent an apartment or a house, the renters insurance policy will protect your possessions if lost due to fire, theft or other insured exposure (such as a disaster).
The Indiana Department of Insurance states, "Your home should be insured for at least 80% of its replacement value. With 80% coverage, the insurance company will pay losses in full, less any deductible, up to the face amount of your policy. If coverage is less than 80% of its current replacement value, a claim is settled on actual cash value — taking depreciation. To adequately insure your dwelling, you must know its replacement value. If you aren't sure of your home's value, play it safe and get help from your agent."
Flood Risks
Flood Risks
Flood Insurance
Standard homeowners and renters insurance policies do not automatically include flood insurance protection. Homes in high-risk flood areas with mortgages from federally regulated or insured lenders are required to have flood insurance. Even if flood insurance is not required, it is still important to buy it.
According to FEMA, 99% of all counties in the United States have experienced flooding since 1996, and Indiana experienced 77 flooding or heavy rain events in 2023 alone (NOAA).
To help pay for damage, Congress established the National Flood Insurance Program (NFIP), which is a federal program enabling property owners in participating communities to buy insurance to protect against flood losses.
NFIP policies oftentimes can be purchased through the same insurance agents who provide homeowners and renters insurance. Once purchased, NFIP policies can take up to 30 days to go into effect.
Get Help: Applying for Assistance
Many disasters do not reach the threshold for SDRF funds to become available, so having insurance in place is a critical step to take now, before a disaster occurs. Although SDRF funds are intended to assist those who are uninsured or under-insured, they will not be sufficient to "fully recover" following a disaster.
When a disaster rises to the level that SDRF funds become available, IDHS will announce the opportunity to apply for public entities or individuals, depending on the situation.
As part of the application process, individuals will be required to file a claim with their insurance first. After factoring in what the insurance company is paying, IDHS makes site visits to inspect the damage. Afterward IDHS makes a determination of how much SDRF money may be awarded. If approved, funds are deposited into a recipient's banking account.
Learn more below about the two programs that facilitate the SDRF.