What changes to FEMA aid may mean for homeowners

As the Trump administration moves to wind down the Federal Emergency Management Agency, changes could make it harder for homeowners to recover from a natural disaster, experts say.

That underscores a point insurance experts make: FEMA provides aid for states and individuals in the event of a federally declared natural disaster, but it’s not meant to replace your home insurance policy, according to Charles Nyce, a risk management and insurance professor at Florida State University.

“There’s a lot of different things that FEMA does really well, but one of the things they’re not designed for is to be a replacement for insurance coverage for individuals,” said Nyce.

President Donald Trump said in a June 10 press briefing that he plans to “start phasing [FEMA] out” after this year’s hurricane season, which spans from June 1 to November 30.

Trump also said the administration would “give out less money” in disaster aid to states and “give it out directly” from the president’s office: “We’re going to do it much differently.” 

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“Over the next couple of months, we’ll be working on reforms and what FEMA will look like in the future as a different agency as under the Department of Homeland Security,” DHS Secretary Kristi Noem said in the briefing.

Asked about the potential changes, a FEMA spokesperson told CNBC that the agency is “laser focused” on disaster response for this hurricane season and “protecting the American people.”

The Department of Homeland Security proposed to cut $646 million from FEMA’s budget for fiscal year 2026, according to a May letter from the Office of Management and Budget. In April, FEMA announced it was ending a disaster prevention and mitigation grant program, returning $882 million in funding to the Treasury.

Such actions are “reckless,” Sen. Raphael Warnock, D-G.A. wrote in a June 5 letter to Noem.

The administration and DHS “have haphazardly and irresponsibly worked to dismantle the nation’s lead disaster response agency without any workable alternative or sense of direction,” he wrote.

“FEMA is not going to be able to operate in the same way that it has in the past,” said Jeremy Porter, head of climate implications at First Street Foundation, a nonprofit research organization focused on climate risk.

He and other experts say that the administration’s…