Disaster Recovery Journal

Windsor, Conn. -- To help you meet the costs of complying with local floodplain management requirements, the National Flood Insurance Program includes Increased Cost of Compliance (ICC) coverage in all new and renewed Standard Flood Insurance Policies.

If your home or business is located in a special flood hazard area and becomes substantially damaged by any peril, you may be required to meet certain building requirements designed to reduce future flood damage when you rebuild or repair.

Communities that participate in the National Flood Insurance Program (NFIP) agree to adopt and enforce a floodplain management ordinance to reduce or eliminate loss of life and property. When a community has determined that a structure within its jurisdiction and located in a special flood hazard area is substantially damaged, the community requires the property owner to obtain a special floodplain building permit prior to beginning the reconstruction process. The floodplain building permit outlines the requirements necessary to comply with your community's adopted and enforced floodplain management ordinance.

How Much Coverage is Available? An additional benefit to flood insurance policyholders in high-risk areas is the possibility of receiving up to $30,000 to help pay the costs of bringing their home or business into compliance with their community's floodplain management ordinance.

Do I have options? There are four options you can choose to comply with your community's floodplain management ordinance and help you reduce your risk for future flood damage. You may want to speak with your local officials who can help you decide which of these options is best for you.

1. Elevation. This raises your home or 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. Flood proofing. This option is available primarily for non-residential 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 should I 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 a 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 NFIP flood insurance claim payments for each of the two flood losses.

How do I 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, local officials will explain the floodplain management ordinance provisions that you will have to meet. You may also want to consult with your local officials before making the final decision about which option to pursue.

Next, contact the insurance company or agent who wrote your flood policy to file an ICC claim. Your insurer will assign a claims representative who will help you process your ICC claim. You should start getting estimates from contractors to take the necessary steps to elevate, relocate, flood-proof or demolish the structure.

Can I receive payment prior to beginning work? You may be able to receive a partial payment once the claims representative has a copy of the community's substantial damage letter, a signed contract for the work, a permit from the community to do the work and a return of your signed ICC Proof of Loss. If the work is not completed, you must return any partial payment to your insurer.

When the work is completed, local officials will inspect and issue a certificate of occupancy or a confirmation letter. Once you submit this document to your claims representative, your insurer will pay the final installment or full payment.

Claims will only be paid on flood-damaged homes and businesses and can only be used to pay for costs of meeting the floodplain management ordinance in your community.

For more information on ICC coverage, call your insurance company or agent, or call the NFIP toll-free at 1-800-427-4661 or (TTY) 1-800-427-5593.

Additional information is also available at: www.fema.gov

FEMA's mission is to support our citizens and first responders to ensure that as a nation we work together to build, sustain, and improve our capability to prepare for, protect against, respond to, recover from, and mitigate all hazards.