Flood Insurance Options May Ease Rebuilding Costs
ICC coverage is tremendous benefit
Release Date: April 26, 2006
Release Number: 1603-439
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NEW ORLEANS, La. -- Under the National Flood Insurance Program (NFIP), individuals and business owners in Louisiana who purchased flood insurance before Hurricanes Katrina and Rita could qualify for increased financial assistance to cover the cost of rebuilding or relocating their homes or businesses. NFIP is administered by the U.S. Department of Homeland Security's Federal Emergency Management Agency (FEMA).
The Increased Cost of Compliance (ICC) provision written into all NFIP policies purchased or renewed since June 1, 1997 can provide up to $30,000 to offset homeowner and business costs. To qualify for ICC money, the damaged structure must be in a High Risk Flood Zone “A” and the total claim including ICC cannot exceed the policy maximum.
"The ICC provision is designed to help policy holders take steps to reduce future flood damage to their home or business,” said Diana Herrera, NFIP spokeswoman for FEMA in Louisiana. "The speed and paths of recent storms reminds us how quickly they can cause widespread damage." Flash floods, coastal storm surges and overflows menace large areas of Louisiana.
Homeowners and businesses may file an ICC claim with their flood insurance company if the building has "substantial damage". Substantial damage is reached when local officials agree that a structure is damaged to the point that repairs will cost 50 percent or more of the building’s value prior to the flood. Before a homeowner decides how best to retrofit the home, four things should be considered: what damage-reduction methods are available, how well will they work, their cost, and whether they meet your needs.
Damage Reduction Methods
- Elevation - Raise your house or business to bring the lowest floor above flood level. This is the most common way to avoid flood damage.
- Wet flood-proofing - Protect a building by allowing floodwaters to enter uninhabited areas of the property—parking and storage areas for example.
- Dry flood-proofing - Seal the building to prevent floodwaters from entering.
- Levees and floodwalls – Barriers constructed of compacted soil or man-made materials like concrete or masonry that block floodwaters.
- Relocation – Move your house or business to higher ground.
- Demolition – Demolish your house or business and clear the site.
- Combination – Employ two or more mitigation measures—for example, demolish a structure and clear the site, then rebuild a structure that is elevated to the community’s requirement on the same site.
Determine What Methods Will Work Best
- Inspect your home or business with the various damage-reduction methods in mind;
- Check with local officials concerning hazards, codes and regulations, technical guidance and financial assistance; and
- Consult with a design professional and a contractor.
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 adjusted separately from the flood-damage claims in that the appropriate local government agency must determine that the structure has been substantially damaged by the flood. This determination is made when the owner applies for a permit to repair the damaged structure. Once the local government has made that decision, the policyholder should call his or her insurance agent to file an ICC claim.
FEMA manages federal response and recovery efforts following any national incident. FEMA also initiates mitigation activities, works with state and local emergency managers, and manages the National Flood Insurance Program. FEMA became part of the U.S. Department of Homeland Security on March 1, 2003.
Last Modified: Wednesday, 26-Apr-2006 11:13:00