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Hurricane Charley

FEMA help for uninsured limited

The agency helps with basic needs and safety. Loans are another option.

Published August 24, 2004

ARCADIA - Judith Williams knows her 34-year-old mobile home wasn't worth much - except to her.

It was destroyed by Hurricane Charley. She has no insurance to rebuild it and, because the storm also damaged the bowling alley where she worked, no income.

"I don't know what I'm going to do," said Williams, 47, as she sat on a mat at a Red Cross shelter last week.

For thousands of uninsured hurricane victims, there is government money to help: small checks to cover immediate expenses in the emergency, low-interest loans to rebuild or grants to start over.

But it's not much.

At first, victims can get up to $5,000 from the Federal Emergency Management Agency for immediate rental assistance or emergency repairs. And the top grant FEMA gives to start over is $25,000, a small fraction of what it takes to rebuild most homes.

"There is this perception that if you depend on FEMA there's going to be this pot of money at the end of the rainbow," said Carolyn Gorman, vice president of the Insurance Information Institute.

Generally, that's not true.

"We are just trying to make them safe, secure and sanitary," FEMA spokesman Eugene Brezany said. "It covers basic needs only. It does not compensate for total loss. There is no substitute for insurance. We are only there to get people back on their feet."

If the individual grants are small, however, their total will likely be massive. The Insurance Information Institute has estimated the uninsured storm-related losses at $4-billion to $6-billion.

FEMA will not cover all of that, agency spokesman Doug Welty said. Much of the loss will be absorbed by property owners, and some will be replaced by charities such as Habitat for Humanity.

But FEMA's share - and therefore the amount paid by taxpayers - is expected to be substantial, though there is no estimate of how high it might go.

Through Sunday, the agency had received 112,127 requests for aid and had responded to a small fraction of them with $44-million in grants. The Small Business Administration, meanwhile, accepted 82,726 applications for low-interest loans.

"These numbers are going to go up and up and up," Brezany said.

The FEMA grants are not based on income and are designed only to provide minimal repairs to make homes livable, not to restore them to prehurricane condition, he said.

In Arcadia, FEMA's representatives arrived three days after the storm, putting a trailer next to a mobile kitchen at the town's main shelter. Applicants use a toll-free number to make their claims, and the information is sent to laptops carried by inspectors.

"That was quick," said Shirley LaBocki, 81, when an inspector appeared at her single-wide mobile home in Arcadia on Wednesday. She had called FEMA the day before, worried that her $11,000 in insurance wouldn't cover Charley's damage.

Inspector John Cope explained that FEMA would pay only to make her house safe and weatherproof. The damage to her roof might qualify for reimbursement, he said. The destruction of her Florida room would not.

And, he said, FEMA would only pay after she had settled with her insurance company, which means she might receive nothing at all.

"I don't see $11,000 of damage here," Cope said.

Residents who need large sums to help rebuild or repair major storm damage are referred to SBA, which lent 23,400 property owners more than $656-million in the aftermath of Hurricane drew.

SBA loans are limited to the amount of damage or value of possessions lost in the storm, and are offset by what homeowners receive from their insurance company, said SBA spokesman Carl Dombek.

That makes them no better than FEMA grants as a substitute for insurance, said Carolyn Gorman of the Insurance Information Institute. Uninsured or underinsured homeowners still must repay them, often while paying off their mortgages.

That prospect seemed hopeless to Kim Rogers, 34, who applied for a loan last week at the SBA's temporary office at the middle school in Arcadia.

The roof of her home was too damaged to repair, she said. Her drywall and carpet had been ruined by the rain that fell most of the week.

"The (insurance) adjuster said it's pretty well totaled," said Rogers, who now lives with her husband and parents in a travel trailer.

Rebuilding will almost certainly cost more than her $33,000 policy can pay, she said. She also owes $29,000 after recently refinancing the house.

For Rogers and other property owners who live in the disaster area, SBA will grant a loan of up to $40,000 for personal belongings and up to $200,000 for home repairs. Businesses can borrow up to $1.5-million. The interest rates are low, about 3 percent, and payments can be stretched over 30 years.

But Rogers makes $11,000 a year as a school bus driver. Her husband has been put out of work by the storm, which destroyed the auto shop were he worked as a mechanic.

"What's the use of filling this out if I can't pay it back?" she said.

"How much do I have in the bank now?" she asked, looking at the form. "Zero."

Those who clearly cannot repay a loan are often referred to FEMA to apply for nonreimburseable grants, Dombek said.

These grants, for primary residences only, can be for as much as $25,000, minus what homeowners have received in emergency grants. Typically, they are far smaller.

"They might be for a couple of thousand," Welty said.

Ola Norman said that is not what FEMA representatives told her.

Norman, 49, was one of several people at the shelter whose mobile homes had been destroyed by the storm. She was unable to get insurance because it was built in 1970, she said. But when she visited FEMA's trailer, she said, she was told the agency might place a new trailer on the old pad.

That's not likely, Welty said. The agency will not pay for a new mobile home but might give Norman a grant to help her start making payments on a used mobile home.

That would be fine, Norman said.

"I don't care if it's old," she said, "as long as I have a home."

Times staff writer Jeff Harrington contributed to this report.

[Last modified August 24, 2004, 00:10:13]

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