What is a Casualty Loss?
A loss caused by a sudden, unexpected event like a fire or storm can be tax deductible. To qualify, actual physical damage to property must occur, not simply a temporary decline in the value of property. The loss can be on any kind of property, either business or personal and generally only property belonging to the taxpayer will qualify.
Rev Rul 73-41, 1973-1 CB 74 states that if a taxpayer leases real property and the terms of the lease say that the taxpayer is responsible for the damage, he/she (lessee) can also qualify for a casualty loss deduction.
LIST OF FEDERAL DECLARED DISTERS - FEMA