Lott, R-Miss., lost his home in Pascagoula to the Aug. 29 storm.
Lott, 64, was elected to the U.S. Senate in 1988. He is the former majority leader in the Senate and previously served 16 years in the U.S. House.
In an interview with The Sun Herald newspaper on Friday, Lott said his Pascagoula home was his nest egg.
"It was about half my net worth. I have a $400,000 loss after the flood insurance. Its appraised value was probably $600,000 to $700,000, but I had been offered more to sell it," Lott told the newspaper.
He said his house was the first thing he ever had that was paid for. He said he will rebuild but not immediately.
"From a personal standpoint, I need a little more income. But the people I care most about, those on the coast, are hurting and need help.
"There's been the implication that I can do more here for them than somebody else, but the truth is somebody else could do just as good. I don't know. My family and I will be discussing it over Christmas," Lott said.
He said his family is divided over his running again.
"My son is saying, 'Get out, enjoy yourself.' My daughter is telling me there is no way I can leave it. She's probably smarter than my son, but he knows how to enjoy life. My wife is a trouper, but she's had to sacrifice a lot and I think she's ready for me to go do something else," Lott said.
Lott said another consideration is that he is "so disappointed with the (Bush) administration's response to this disaster that I'm almost embarrassed."
"I won't be complicating anybody's Christmas by making a decision (before the first of the year)," he said.
There would be no lack of interest in the job. U.S. Rep. Chip Pickering, R-Miss., has been expected to run for the Senate when Lott or Mississippi senior Sen. Thad Cochran, R-Miss., retired. Democrats who might be interested include former attorney general Mike Moore.
Lott hinted that if he returned to the Senate, he might seek a leadership post.
"If I come back, I might run for leadership. I might do it just to make everybody nervous," he told the newspaper.
"There are problems in here. We have sunken to a level that really bothers me. I've always tried to get the most things done for my people. The way to get the most done is being leader."
Lott lost his post in 2002 after making racially tinged remarks at a 100th birthday party for one-time segregationist Sen. Strom Thurmond.