This legislation, titled the Disaster Resiliency and Coverage Act of 2025, amends the Robert T. Stafford Disaster Relief and Emergency Assistance Act to establish a new federal grant program. This program requires the President to provide grants to States and Indian tribal governments to fund pre-disaster mitigation activities for individual residential households vulnerable to major disasters. The overarching goal is to bolster residential resilience against natural hazards and foster a more robust and accessible homeowner insurance market. To participate, States and Indian tribal governments must submit a comprehensive plan to the President. This plan must include an assessment of homeowner insurance availability and affordability in their proposed risk areas, an analysis of factors impacting insurance, and criteria for evaluating applicants that consider household income and whether the residence is in a Community Disaster Resilience Zone. The President, acting through the Administrator of the Federal Emergency Management Agency (FEMA) and the Director of the Federal Insurance Office, will consult with insurance regulators and stakeholders to identify qualifying mitigation activities that incentivize insurance availability and purchase. The program includes specific limitations, such as restricting funds to eligible disaster areas deemed high-risk and imposing an income cap, making individuals with an adjusted gross income exceeding $250,000 ($500,000 for joint filers) ineligible. Grants are capped at $10,000 per household, adjusted annually for inflation, and FEMA is tasked with establishing multi-tiered mitigation standards. States and tribes must also provide guidance to insurance providers and consumers on suggested incentives, such as discounts or premium credits, for households undertaking mitigation efforts. Beyond the grant program, the bill introduces significant tax benefits. Amounts received by individuals from this new federal program are excluded from gross income, as are qualified catastrophe loss mitigation payments received from state-based programs. Furthermore, a new 30 percent tax credit is established for qualifying disaster mitigation expenditures paid or incurred by taxpayers, with the credit percentage adjusted if a state contributes to the cost. The legislation also expands the definition of "qualified disaster relief payment" to include various forms of emergency agricultural assistance.