Flood Insurance - Increased Cost of Compliance Coverage

If your home or business is damaged by a flood, you may be required to meet certain building requirements in your community to reduce future flood damage before you repair or rebuild. To help you cover the costs of meeting those requirements, the National Flood Insurance Program (NFIP) includes Increased Cost of Compliance (ICC) coverage for all new and renewed Standard Flood Insurance Policies.

How Much Coverage Is Available? - Flood insurance policyholders in high-risk areas, also known as special flood hazard areas, can get up to $20,000 to help pay the costs to bring their home or business into compliance with their community's floodplain ordinance.

Four Options Covered - There are four options you can take to comply with your community's floodplain management ordinance and help you reduce future flood damage. You may decide which of these options is best for you. 1. Elevation. This raises your home of business to or above the flood elevation level adopted by your community. 2. Relocation. This moves your home or business out of harm's way. 3. Demolition. This tears down and removes flood-damaged buildings. 4. Floodproofing. This option is available primarily for nonresidential buildings. It involves making a building watertight through a combination of adjustments or additions of features to the building that reduces the potential for flood damage.

When to File an ICC Claim - You may file a claim for your Increased Cost of Compliance coverage in two instances: 1. If your community determines that your home or business is damaged by flood to the point that repairs will cost 50 percent or more of the building's pre-damage market value. This is called substantial damage. 2. If your community has a repetitive loss provision in its floodplain management ordinance and determines that your home or business was damaged by a flood two times in the past 10 years, where the cost of repairing the flood damage, on the average, equaled or exceeded 25 percent of its market value at the time of each flood. This is called repetitive damage. Additionally, there must have been flood insurance claim payments for each of the two flood losses.

How to File an ICC Claim - Your ICC claim is adjusted separately from the flood damage claim you file under your Standard Flood Insurance Policy. You can only file an ICC claim if your community determines that your home or business has been substantially damaged or repetitively damaged by a flood. This determination is made when you apply for a building permit to begin repairing your home or business. If your community does determine that your home or business is substantially or repetitively damaged, a local official will explain the floodplain management ordinance provisions that you will have to meet. You may also want to consult with the local official before you make the final decision about which of the options to pursue.

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