As thousands of Albertans begin cleaning up their flooded homes, questions are being raised about whose pockets the money is going to come out of to help repair the damage.

Insurance companies aren't going to be the ones picking up the tabs since "overland flooding" — water that comes in through doors and windows — is not covered by most policies. According to the Insurance Bureau of Canada, overland flooding is a risk for only a small percentage of the population (those that live on a flood plain or close to bodies of water) and most homeowners are not willing to pay the extra costs to be protected against the risk.

So with insurance generally not being an option, homeowners will be turning to the government for help. Alberta Premier Alison Redford announced Monday that a preliminary $1 billion in spending has been approved to support immediate flood recovery and reconstruction efforts. The government is also committing to provide preloaded debit cards for housing needs and day-to-day purchases. They will be worth $1,250 per adult and $500 per child.

She promised to do "everything it takes" to help people rebuild their homes and Redford said it won't take as long as it has in past disasters to get financial assistance to those who need it. She said people should be able to get funding in under two weeks.

Redford said she knows everyone is wondering how much this disaster is going to cost, and the answer is, "We don't yet know."

Citizenship and Immigration Minister Jason Kenney, MP for Calgary Southeast, said Monday that people shouldn't rush to figure out a dollar amount, noting that some communities are still in states of emergency.

Kenney said Prime Minister Stephen Harper has confirmed with Redford that, as usual, the federal government will participate in disaster relief programs that share costs with the provinces.

"The federal government will be there in a significant way," he said. The federal government often ends up reimbursing 90 per cent of eligible expenses submitted by the provinces, according to Kenney. It's the provinces that take the lead, though on disaster assistance, the federal government does not provide direct financial help to victims, he said.

"Don't go to your local MPs asking them to help you with your disaster assistance claim," said Kenney.

He also added that Ted Menzies, minister of state for finance and an Alberta MP, has raised concerns with the Insurance Bureau of Canada about flood coverage. "We encourage the industry to respond in an appropriate way," said Kenney.

Here's a closer look at the provincial and federal assistance programs.

Alberta's Disaster Recovery Programs: 

A municipality applies to the province for a disaster recovery program. It provides funding for residents, small business owners, agricultural producers and municipalities for losses and damage that is not covered by insurance. If the province approves the request, a program is set up, and then the paperwork begins.

Residents must fill out an application and it has to include a property assessment and a letter from their insurance company stating why the losses aren't covered. An evaluator is assigned to the case and decides whether to recommend funding. Residents are advised to take photos of damaged property, keep receipts, and keep track of how much time is spent on clean up. Some examples of what can be covered:

  • Shop vac rental or cleaning service.
  • Clothing.
  • Appliances and furniture.
  • Sports equipment.
  • Structural repairs.
  • Laptop and cellphone.

Disaster Financial Assistance Arrangements 

The DFAA, administered by Public Safety, is how the federal government provides assistance to the provinces and territories after a natural disaster. The federal government does not give direct financial support to individuals or businesses, it all goes through the provincial and territorial governments.

The money helps cover the costs for evacuations and emergency shelters, for example, and infrastructure but is also meant to trickle down to individuals as well. The money only flows if the federal government gets a request for reimbursement from the affected province. The request can be made when eligible expenditures exceed $1 per capita. There is a cost-sharing formula that kicks in to determine how much the federal government pays. Eligible expenses can include the replacement of personal property and repairs to a home.

Since the program was created in 1970, the federal government has paid out more than $2 billion. When Alberta faced floods in 2005 the DFAA program was used and the federal government doled out $129,049,397. It was paid in three instalments, the third being just this past April.