FEMA Obtain and Maintain Insurance Requirement Explained

Key points

A facility repaired with Public Assistance generally must be insured against the same hazard, and the insurance must be kept in force.
If the required insurance was not maintained, the facility is ineligible for assistance in a later disaster. The statute bars waiver of this requirement under the Act’s general waiver authority.
For flood, assistance on buildings in a mapped flood hazard area is reduced by what a standard flood policy would have paid, even in the first disaster.
The requirement applies to state, local and tribal governments and eligible private nonprofits.

How the rule works

The requirement attaches when Public Assistance pays to repair, restore or replace an insurable facility under Section 406 of the Stafford Act. FEMA notifies the applicant of the type and amount of insurance required, generally based on the eligible damage from the disaster, and the applicant must obtain that coverage and keep it in force ^1,4.

Next disaster, same hazard	Result
Required insurance was maintained	Insurance proceeds are applied first. Public Assistance may consider remaining eligible costs, subject to the Section 312 bar on duplication of benefits ².
Required insurance was not maintained	The facility is ineligible for assistance. The statute bars waiver of this requirement under the Act’s general waiver authority ¹.

Flood is different, and it can reduce assistance in the first disaster. For an insurable building in a special flood hazard area identified for more than one year, FEMA reduces assistance by the maximum amount a standard flood insurance policy would have paid, whether or not the building was insured ³.

The rules, by authority

Source	Authority type	What it says
Stafford Act § 311(a), 42 U.S.C. § 5154(a) ¹	Federal statute	An applicant for repair assistance must comply with regulations to assure that insurance is obtained and maintained where reasonably available, adequate and necessary. FEMA may not require more than the state insurance commissioner certifies as reasonable.
Stafford Act § 311(b), 42 U.S.C. § 5154(b) ¹	Federal statute	No assistance for property that previously received assistance unless the required insurance was obtained and maintained. This requirement may not be waived under the Act’s general waiver authority, 42 U.S.C. § 5141.
Stafford Act § 311(c), 42 U.S.C. § 5154(c) ¹	Federal statute	A State may elect to act as a self-insurer for state-owned facilities under a plan satisfactory to FEMA.
44 C.F.R. § 206.252 ³	Federal regulation (flood)	Mandatory reduction in a mapped flood hazard area; obtain and maintain flood insurance in the amount of eligible assistance, including outside the mapped area when reasonably available, adequate and necessary; waived when eligible costs do not exceed $5,000.
44 C.F.R. § 206.253 ⁴	Federal regulation (other hazards)	Report insurance recoveries; required coverage based on eligible damage; blanket policies and insurance pools allowed for non-flood hazards; review by the state insurance commissioner available; waived when eligible costs do not exceed $5,000.
FEMA Recovery Policy FP 206-086-1 and the Public Assistance Program and Policy Guide ^5,6	Federal agency policy	Explain how FEMA applies the requirement, including letters of commitment when a facility cannot be insured before grant approval.

Who certifies. The state insurance commissioner cannot waive the federal requirement, but can certify what types and extent of insurance are reasonable, and FEMA may not require more ^1,4. The regulations refer to the State Insurance Commissioner. How that certification works for a tribal applicant, whose facilities may sit outside state insurance regulation, is a question to raise with the FEMA region early.

Self-insurance. The statute allows a State to elect self-insurance for state-owned facilities ¹. For non-flood hazards, the regulations allow other applicants to use blanket policies, insurance pools or a combination ⁴.

What FEMA’s appeal decisions show

FEMA publishes its second appeal decisions. They are agency decisions, not court rulings, but they show how the rule is applied.

Applicant and event	FEMA’s decision
St. Andrews University (N.C.), Hurricane Florence. A building repaired with Public Assistance after Hurricane Matthew had no flood coverage when Florence struck.	Facility ineligible; $1,727,773.41 in repair funding denied ⁷
Plaquemines Parish (La.), Hurricane Isaac. Insurance required after Hurricane Katrina was not obtained or was insufficient at four sites.	Reductions of $797,809.92 upheld ⁸
St. Lucie County (Fla.). A facility with an insurance requirement from a prior disaster was damaged again.	Eligible costs reduced up to the amount of the earlier insurance requirement ⁹
Gulf Marine Institute of Technology (Tex.), Hurricane Ike. Flood damage in a mapped flood hazard area.	Mandatory flood insurance reduction of $127,668 upheld ¹⁰
Pajaro Valley Unified School District (Cal.), 1995 floods. Schools in a mapped flood zone flooded without flood insurance.	Assistance limited to the $750 standard policy deductible per site ¹¹

Why the rule exists. The statute’s purpose is to protect against future loss to property repaired with federal funds ¹. Louisiana’s emergency management agency describes it as protecting against future loss from the same type of peril and safeguarding the federal investment in restored facilities ¹².

The oversight record. The Department of Homeland Security Inspector General examined how FEMA tracks these requirements in 2011 and again in 2017, and found that FEMA’s systems did not reliably show whether a facility had received assistance in a prior disaster ^13,14. For applicants, that means a requirement may not be flagged when a new claim is filed and can surface later, at closeout or audit. For FEMA, enforcement depends on records that applicants and states also keep.

A checklist for applicants, tribes and contractors

Inventory every facility that has received Public Assistance for permanent work. Each may carry an insurance requirement, by hazard and amount, written into the project record.
Match each requirement to the current policy schedule. Check the hazard, the limit and the named location, not only whether a policy exists. A building dropped from a schedule at renewal, or a limit reduced to save premium, can create a gap that no one notices until the next disaster.
Check flood separately. For buildings in a mapped flood hazard area, the standard flood policy maximum is deducted even without a prior grant ³.
Keep every certification. If insurance was not reasonably available, the commissioner’s certification is the record that limits what FEMA can require ^1,4.
Raise it at the first meeting after the next declaration. Applicants, and contractors managing Public Assistance work for them, should confirm the insurance history before project worksheets are written, not at closeout.
Tribal applicants: confirm with the FEMA region how insurance requirements and certifications will be handled, since the regulations are written around state insurance regulators.

Common questions

What is FEMA’s obtain and maintain insurance requirement?

When Public Assistance pays to repair an insurable facility, the applicant generally must insure that facility against the same hazard, in the type and amount FEMA specifies, and keep the insurance in force. It comes from Section 311 of the Stafford Act, 42 U.S.C. § 5154, and 44 C.F.R. §§ 206.252 and 206.253.

What happens if the required insurance lapses?

If the same type of disaster damages the facility again and the required insurance was not maintained, the facility is ineligible for assistance, and the statute bars waiver of the requirement under the Act’s general waiver authority. FEMA appeal decisions have denied more than $1.7 million on a single facility on this basis.

Is there a minimum amount before the requirement applies?

Yes. Under 44 C.F.R. §§ 206.252 and 206.253, the insurance requirement is waived when eligible costs for an insurable facility do not exceed $5,000.

Working with Okla Risk Advisors

Okla Risk Advisors works where insurance and FEMA Public Assistance meet, for tribal governments, local governments, nonprofits and the contractors who serve them:

To discuss a file or a question, email chrischambers@oklariskadvisors.com or use the contact page. The firm accepts engagements from either side of a dispute.

About the author

Chris Chambers is an Executive General Adjuster and the founder of Okla Risk Advisors. He has more than 25 years of catastrophe property and casualty experience and has deployed to many of the large-scale U.S. disasters since 2004. He holds an MLS in Indigenous Peoples Law from the University of Oklahoma, is a member of the Oklahoma Indian Bar Association, and is an enrolled citizen of the Choctaw Nation of Oklahoma. He holds NFIP certification at all four levels and FEMA IS-318.b certification.

This article is general information, not legal advice. Authorities are current as of October 21, 2026.

Sources

Robert T. Stafford Disaster Relief and Emergency Assistance Act § 311, 42 U.S.C. § 5154, text. Federal statute
Stafford Act § 312, 42 U.S.C. § 5155, text. Federal statute
44 C.F.R. § 206.252, text. Federal regulation
44 C.F.R. § 206.253, text. Federal regulation
FEMA, Recovery Policy FP 206-086-1, Public Assistance Policy on Insurance, 80 Fed. Reg. 37,004 (June 29, 2015) (notice of availability), notice; policy text. Federal agency policy
FEMA, Public Assistance Program and Policy Guide, Version 5.0 (applies to declarations on or after Jan. 6, 2025), Public Assistance policy library. Federal agency policy
FEMA, Second Appeal, St. Andrews University, FEMA-4393-DR-NC, decision. Federal agency decision
FEMA, Second Appeal, Plaquemines Parish Government, FEMA-4080-DR-LA, decision. Federal agency decision
FEMA, Second Appeal, St. Lucie County, FEMA-1785-DR-FL (May 31, 2012), decision. Federal agency decision
FEMA, Second Appeal, Gulf Marine Institute of Technology, FEMA-1791-DR-TX (Dec. 19, 2011), decision. Federal agency decision
FEMA, Second Appeal, Pajaro Valley Unified School District, FEMA-1046-DR-CA (Feb. 2, 1998), decision. Federal agency decision
La. Governor’s Office of Homeland Sec. & Emergency Preparedness, Public Assistance Insurance Requirements. State agency guidance
U.S. Dep’t of Homeland Sec., Office of Inspector Gen., OIG-12-18, FEMA’s Process for Tracking Public Assistance Insurance Requirements (Dec. 2011). Federal oversight report
U.S. Dep’t of Homeland Sec., Office of Inspector Gen., OIG-17-50-VR, Verification Review: FEMA’s Lack of Process for Tracking Public Assistance Insurance Requirements Places Billions of Tax Dollars at Risk (June 9, 2017). Federal oversight report

The Second-Disaster Trap: FEMA’s Obtain and Maintain Insurance Rule