Flood Insurance Can Offset Cost of Meeting Building Code Requirements

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Release date: 
September 30, 2003
Release Number: 
1495-09

New Castle, DE-Increased Cost of Compliance (ICC) coverage, featured in most standard National Flood Insurance Program (NFIP) policies, may provide owners of damaged buildings with up to $30,000 to help pay the costs of complying with local building codes and floodplain ordinances.

"Most flood policyholders know that flood insurance can replace contents and building losses, but many are unaware that their policies include ICC benefits that help pay to comply with building codes and floodplain ordinances," Federal Coordinating Officer, Mike Hall said. "This is a valuable source of mitigation money that is sometimes overlooked."

If a building has been severely or repeatedly flooded, and has been designated by the local building department as "substantially damaged" or a "repetitive loss property," the NFIP policyholder is eligible to file for ICC benefits. This claim, although part of the same flood insurance policy, is filed separately from the contents or building damage claim.

ICC benefits may be added to low-interest SBA loans, private funds, and disaster and mitigation assistance grants to pay for floodplain management compliance measures designed to reduce future flood damages. Community officials can help determine which mitigation measures homeowners can use to comply with the local floodplain management ordinance. This may include options to relocate, elevate, demolish, or flood proof (non-residential properties only) a flood-damaged structure.

NFIP policyholders who own properties with extensive or repeated flood damage are encouraged to contact their building departments and ask whether they may be eligible to file an ICC claim. If eligible, the owner's claim will be filed with his or her insurance company.

On March 1, 2003, FEMA became part of the U.S. Department of Homeland Security. FEMA's continuing mission within the new department is to lead the effort to prepare the nation for all hazards and effectively manage federal response and recovery efforts following any national incident. FEMA also initiates proactive mitigation activities, trains first responders, and manages Citizen Corps, the National Flood Insurance Program and the U.S. Fire Administration.

Last Updated: 
July 16, 2012 - 18:46
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