Increased Cost of Compliance

Increased Cost of Compliance coverage - an additional flood insurance benefit of up to $30,000 to help pay for mitigation measures that reduce flood risk after a flood loss. ICC coverage is automatically included in all NFIP policies at no additional cost. It can be used for elevation, relocation, demolition, or floodproofing of buildings that have been substantially damaged or repetitively flooded. ICC funds are paid in addition to building claim payments but cannot exceed $30,000. To qualify, the building must be declared substantially damaged by the community, and the mitigation work must meet NFIP and local requirements. ICC coverage helps property owners comply with floodplain management regulations after a loss.

The National Flood Insurance Program is a federal program created by Congress in 1968 to provide flood insurance to property owners, renters, and businesses. Managed by FEMA, the NFIP makes flood insurance available in communities that adopt and enforce floodplain management regulations to reduce future flood damage. Standard homeowners insurance does not cover flood damage, making NFIP policies essential for properties in flood-prone areas. The program offers up to $250,000 in building coverage and $100,000 in contents coverage.

Damage of any origin sustained by a building where the cost of restoring the structure to its pre-damaged condition equals or exceeds 50% of the market value before the damage occurred. Substantially damaged buildings must be brought into compliance with current floodplain management regulations when repaired, including meeting elevation requirements. This applies to damage from any cause (flood, fire, earthquake, etc.), not just flooding. The 50% threshold is calculated using the building's market value excluding land value. Communities track cumulative damage over time to prevent property owners from avoiding compliance through multiple smaller repairs. Substantial damage determinations are made by local floodplain administrators.

The computed elevation to which floodwater is anticipated to rise during a base flood (a flood with a 1% chance of occurring in any given year, also called a 100-year flood). Shown on FEMA Flood Insurance Rate Maps (FIRMs), the BFE is used to determine flood insurance premiums and building requirements. Structures built below the BFE face higher insurance costs and greater flood risk. Local building codes typically require new construction in flood zones to have the lowest floor elevated at or above the BFE. Knowing your property's BFE is crucial for flood risk assessment and insurance decisions.

The repayment value for indemnification due to loss or damage of property; in most cases it is replacement cost minus depreciation.

The decrease in value of property over time due to wear, tear, age, or obsolescence.

The cost to replace damaged or destroyed property with new property of similar kind and quality, without deduction for depreciation.

Insurance coverage that protects your home and personal property against damage, theft, and liability claims.