Flood Insurance Program Offers Additional Funding To Prevent Future Damage 

Release Date: October 16, 2008
Release Number: 1794-018

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Individuals and business owners who purchase flood insurance under the National Flood Insurance Program (NFIP) might qualify for increased financial assistance to cover the cost of rebuilding or relocating their home or business if the property becomes substantially or repetitively damaged due to flooding.

The Increased Cost of Compliance (ICC) provisions written into all standard NFIP policies purchased or renewed since June 1, 1997, can provide up to $30,000 to offset homeowner and business costs. The structure must be in an identified flood hazard area and the total claim, including the ICC grant cannot exceed $250,000 for individuals and $500,000 for business owners.

Homeowners and businesses may file an ICC claim if the building has “substantial damage” as determined by their community's floodplain administrator. ICC funds may be used to elevate the building to the level required by a community ordinance, relocate the building out of the floodplain, flood proof non-residential buildings, or demolish a damaged building. Repairs and rebuilding done under this program must be done in accordance with local building codes and must comply with local floodplain ordinances.

ICC claims are not an automatic part of FEMA disaster assistance. It must be applied for separately and through one's insurance company. Following a determination by a local floodplain administrator that a building has been substantially damaged, i.e., cost of repair equals or exceeds 50 percent of the market value of the building prior to damage occurring, the policyholder should call his or her insurance agent or talk with the adjuster to initiate an ICC claim. The determination of substantial damage is made when the building owner applies for a permit to make repairs.

For information on the NFIP's FloodSmart program visit the Web site at www.FloodSmart.gov.

FEMA coordinates the federal government's role in preparing for, preventing, mitigating the effects of, responding to, and recovering from all domestic disasters, whether natural or man-made, including acts of terror.

Last Modified: Thursday, 16-Oct-2008 15:01:11