Increased Cost of Compliance (ICC)
Plain English
Increased Cost of Compliance, or ICC, is part of an NFIP flood policy. If a flood damages your home badly enough that local rules require you to elevate, move, floodproof or demolish it, ICC can pay up to $30,000 toward that work, on top of the regular flood claim, when the community declares the home substantially damaged.
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Definition
Increased Cost of Compliance is a coverage within National Flood Insurance Program policies that helps pay to bring a flood-damaged building into compliance with the community's floodplain management rules, such as by elevating it, up to $30,000, when the community determines the building is substantially or repetitively damaged.
Why It Matters
After a major flood, rebuilding can come with a requirement to elevate the house, which can cost far more than the repair. ICC is the part of the flood policy designed for that cost.
Real-World Example
Imagine a flood causes damage equal to 55% of a home's pre-flood market value, and the local floodplain administrator declares it substantially damaged. Local rules now require elevating the house before it can be rebuilt. The owners' regular NFIP building claim pays for the flood damage, and they can file a separate ICC claim for up to $30,000 toward the elevation.
Common Misconceptions
- Assuming ICC pays for any upgrade; it's for meeting floodplain rules after flood damage.
- Assuming the regular flood claim covers elevation costs.
Key Takeaways
- FEMA: ICC provides "up to $30,000 to help offset the costs to bring their home or business into compliance" with local floodplain rules.
- Substantial damage means the damage "will cost 50 percent or more of the building's pre-damage market value," per FEMA.
- ICC can be used for elevation, demolition, relocation or floodproofing, per FEMA.
- It applies to flood-damaged buildings insured under the NFIP.
Frequently Asked Questions
How do I file an ICC claim?
After the community's substantial damage determination, contact the insurer or agent who wrote your flood policy.
What's it commonly confused with?
Ordinance or law coverage on a homeowners policy, which is for building code costs after a covered homeowners loss, not flood.
Related Terms
Related Coverages
- Flood Insurance
Related Scenarios
Explore the rest of the Flood Insurance category.
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The factual claims on this page were checked against these sources. Rules and figures change, so check the source itself if you need to confirm the current version.
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