Homeland Security and Emergency Services

Assessment For Small Business Administration Declarations

Phase 1: Initial Estimates

Develop an initial overview of the extent of damage and costs to properties in the most severely impacted areas. This is a preliminary estimate derived by asking knowledgeable local officials to estimate the number of properties damaged, prior to performing any door-to-door or field assessment. This type of overview helps local officials begin to quantify the extent of damages and it provides an initial evaluation that can aid in determining disaster assistance requirements.

The intent of initial estimates is to assemble very general data -- quickly -- without waiting for a formal assessment to be completed. A degree of uncertainty and reliance on unverified or incomplete data is acceptable at this stage.

The objective is to develop an immediate estimate, which includes:

  • Estimated number of homes and businesses damaged
  • An estimate of the number or percentage of properties that have major damage, versus those with moderate or minor damage

Damage figures will not be available for most properties, but if local officials can estimate dollar losses for a few key residences, it will aid in making judgments about others. Concentrate on primary homes and business structures; evaluate secondary buildings and accessory damages later

The Initial Estimate report might look like the following:

  • Major Damage (structural) - 10
  • Moderate (damage to first floor living areas, 15 - 25 roof holes, heating, plumbing, etc.)
  • Minor (basement flooding and any other 40 - 50 items easily repaired)

It is estimated that one home is destroyed and the average loss to nine others may exceed $30,000 each. Half of those with moderate damage could average $15,000 to $20,000 each, while the others are expected to be less. The estimate for those with minor damage is $1,000 or $2,000 each.

Phase II: Damage Assessment

A detailed assessment of damage to homes and businesses should begin early. The American Red Cross assessment will be helpful, but the community should initiate an assessment of their own.

Assessment of homes and business should be undertaken by local officials who do not have other emergency response duties. While they may assign assessment personnel, the emergency manager or Chief Executive are typically too busy with response needs to be concerned with detailed assessment. Suggest to the CEO and Emergency Manager that they establish an assessment team. Building inspectors, assessors, planners, retired engineers and contractors often make good assessment personnel.

A community assessment can use the Red Cross data by supplementing it with dollar estimates for disaster losses. For example, local officials can use the Red Cross addresses and lists to determine the total number of damaged properties. Red Cross also identifies which properties have major or minor damage. This list can be used by local officials to identify the most severely damaged sites and which should be targeted to obtain information that is more detailed. It should be noted, however, that the Red Cross classification of major damage usually means the damage is so severe that the structure is uninhabitable. Many structures that Red Cross lists with minor damage may be of significant scope, however, and would qualify for SBA assistance and should be examined further.

In cases when a Red Cross assessment is not performed or if more complete data is required, the community may perform an independent assessment. Regardless of whether the community conducts its own assessment, or it simply supplements the Red Cross data, the assessment of homes and businesses must include the items listed below. A second phase report or more detailed assessment would incorporate the following information, but it is only needed for the 25 or 30 most severely damaged properties.

  • List of homes and businesses damaged
  • Addresses
  • Type of damages
  • Dollar estimate of damage to each
  • Market value of the property
  • Percent of insurance coverage on the disaster losses

General Instructions

Obtaining Data

It generally works best if the assessment team obtains data from existing public records or community resources, rather than go door-to-door to each residence. It may be necessary to go down each street viewing the outside of properties and briefly talking with a couple of area residents. With this kind of overview, a knowledgeable local official can estimate the dollar losses, even if they do not inspect all the structures. Sometimes, it may be quicker to call some of the damaged property owners by phone. The bulk of the sites with minor or moderate damage can be estimated using an average price. There is rarely time to wait for homeowners to obtain damage estimates from contractors, thus we must rely on the judgment of local officials.

Insurance Coverage

Data on the extent of insurance coverage can generally be determined by contacting several local insurance agents or by calling a few of the affected property owners to establish how widespread insurance coverage is expected to be.

Market Value

The market value of properties can be obtained from local government property assessment records or local officials can often estimate values with reasonable accuracy.

25 to 30 Rule

SBA criteria for its disaster loan program require that at least 25 homes and/or businesses have damages exceeding 40% of their value. Do not try to evaluate or determine which properties have 40% damage, let State or federal officials determine if the criteria are sufficient - just concentrate the assessment on the 25 or 30 most severely impacted properties. If a case can be made for an SBA declaration based on the most severely damaged 25 to 30 sites, the remaining homes or businesses will be able to apply once a declaration is issued. In some major disasters, there may be hundreds of damaged structures, making it difficult, if not impossible to collect data for each.

Sample Private Assessment

County X

Town of Westlake

  • Forty-five (45) homes - basement flooding, appliance damage
    • Two (2) with structural, four (4) with first floor damage
  • Seventeen (17) businesses
    • Most with damage to structure and grounds
    • Six (6) to eight (8) have damage to equipment and material
    • One (1) with lost business revenue

Town of Evans

  • Sixteen (16) homes - basement and appliance damage
    • Ten (10) with first floor damage
  • Four (4) businesses - damage to structure and lost business

Village of Evans

  • Sixty-three (63) homes - same as above, 14 with major structural damage

County Y

Town of Byron

  • Fourteen (14) homes - 12 basement and appliances
    • Two (2) major, wall cracks, shifting, etc
  • Two (2) businesses closed to clan damage
    • Lost revenue; employees laid-off; minor damage

Town of Harmon

  • Twenty-eight (28) homes - trees caused roof damage
  • Basement and appliances