What are the consequences if I have spent portions of my flood insurance claim to support myself/my family during displacement?
All federal funds, including NFIP flood insurance are combined toward the total amount that FEMA will provide. Flood insurance proceeds are intended to be used for the elevation or reconstruction project. The homeowner may contribute cash or may show receipts for eligible work completed. If the insurance money was spent on living expenses, then that is not an eligible use of the money. Insurance proceeds were intended to be invested into the structure. To maintain eligibility for HMGP funds, the homeowner will have to document how they used their flood insurance proceeds.
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