GoFundMe for Natural Disasters: How Crowdfunding Affects Home Insurance

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Susan Meyer

Senior Editorial Manager

Susan is a licensed insurance agent and has worked as a writer and editor for over 10 years across a number of industries. She has worked at The Zebr…

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  • Licensed Insurance Agent — Property and Casualty
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Beth Swanson

SEO Content Strategist

Beth joined The Zebra in 2022 as an Associate Content Strategist. She is a licensed insurance agent whose goal is to make insurance content easy to r…

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  • Licensed Insurance Agent — Property and Casualty

The ongoing LA fires have been nothing short of devastating to many. Thousands of homes and businesses have been destroyed in Southern California. Preliminary damage is estimated to cost insurers over $30 billion, making the fires one of the costliest natural disasters in U.S. history. And that’s only accounting for insured damages. Estimates for non-insured damages could balloon another $10 billion.[1]

Californians who have lost their homes and businesses have begun to file for claims. Still, with so much destruction, the claims process may be lengthy, with some adjusters estimating it could take years for claims to be totally resolved.[2] Instead, many have turned to GoFundMe to handle some of their losses. To date, more than $100 million has been generated on the crowdfunding website for people impacted by the Los Angeles wildfires.[3]

In this article, we’re looking at the history of GoFundMe being used after disasters and things to look out for that could impact other funds you might receive.

GoFundMe and Natural Disasters

GoFundMe is a for-profit crowdfunding platform launched in the U.S. in 2010. Crowdfunding campaigns have generated over $30 billion from 2010 through 2024.[4] Historically, nearly one third of campaigns are started to help with healthcare coverage for unexpected medical issues. However, one growing category is in natural disaster recovery. In 2024, nearly $235 million was raised on GoFundMe to aid in recovery and rebuilding efforts. $100 million was raised alone to provide relief for Hurricanes Helen and Milton.[5] 

While it can be tempting to create one of these campaigns and directly appeal to those who might be able to help financially, there are some things to be aware of.

How GoFundMe funds can impact other relief funds

When you apply for funds from a crowdfunding platform like GoFundMe it may impact funding from other sources. For example, FEMA (Federal Emergency Management Agency) can provide temporary financial assistance for those who lost their homes or possessions in a natural disaster but, by law, it cannot pay to cover items covered by something else. So if your GoFundMe explicitly says it’s going to replace your flooded truck and you apply for FEMA funds for transportation, it may impact your eligibility.[6]

What about home insurance? Unlike FEMA, home insurance providers generally don’t have a stance on accepting crowdsourced funding. After all, you will still have to pay a deductible, and you could use the GoFundMe proceeds for that. 

The only issue might be if your financial gifts were enough to cover things already covered by your policy. Insurance is intended to cover the actual loss you sustain and that’s what the money should go to. So, for example, let's say your laptop was stolen and you used crowdsourced funds to replace it. If you had also filed a claim and received funds from your insurance company to replace the laptop, you might have to pay the insurance company back.

FEMA versus home insurance

During an officially declared natural disaster, many people apply for FEMA grants. As mentioned above, FEMA funds are designed to pay for immediate needs that are not covered by other sources. If you are uninsured or underinsured, they may be able to help you recover. However, if you do have home insurance, that should be your focus for long-term rebuilding and recovery losses.

Here's a quick breakdown of the differences. 

FEMA

  • Provides basic needs and critical repairs to make your home habitable
  • Can help with temporary living and transportation assistance
  • Is only available in declared disaster areas

Home Insurance

  • Covers damage to your home and personal property
  • May also cover living expenses for you and your family while your home is being repaired
  • Can make you "whole" again after a loss

What to do if impacted by a natural disaster

  1. If you need temporary relief for your immediate needs, you can apply for aid from FEMA. You can also apply for assistance from the SBA (Small Business Administration) that, contrary to what the name might suggest, provides assistance to individuals even if they don’t own a business. 
  2. Gather documentation for your insurance company. To ensure maximum payout, provide detailed videos and photos of the damage sustained and how your home looked before it was damaged. Compile receipts for items that were lost or damaged. 
  3. File a claim with your home insurance company as soon as possible. 
  4. Follow up as needed. Take careful notes during the process of who you spoke with and when. 
  5. If you feel the need to create a GoFundMe or other crowdsourced funding method, make sure to keep your ask vague (Example: "funds to help a fire victim," instead of "funds to replace burned down shed") and use the funds for things not covered by other sources, such as your home insurance deductible.

Wrapping up

If you suffer major losses during a natural disaster, it's devasting. It can be hard to know where to start. Turning to loved ones and allowing them to help can support you at an incredibly difficult time. While GoFundMe funds are likely not going to be enough to rebuild your house, the additional money can be helpful in taking care of things not covered by home insurance. 

Sources
  1. Los Angeles fire losses could reach $30 billion for insurers. [ABC News]

  2. Experts caution L.A. fire victims to approach insurance claims process as 'business transaction'. [NBC News]

  3. How your GoFundMe could impact your FEMA assistance for LA wildfires. [ABC News]

  4. GoFundMe says $30 billion has been raised on its crowdfunding and nonprofit giving platforms. [AP News]

  5. Year in Help: 2024. [GoFundMe]

  6. How your GoFundMe could impact your FEMA assistance for LA wildfires. [ABC News]