Funds For Flood Insurance Policyholders

Flood insurance policyholders whose structures were damaged by flooding from Hurricane Ike may be eligible for up to $30,000 in coverage in addition to their claims for damages.
 
The extra money may be used to make their homes or businesses safe from future floods; to elevate, demolish or relocate the damaged structure. For non-residential structures, the funds may also be used for flood-proofing.
 
The benefit is called Increased Cost of Compliance, or ICC coverage, because it helps pay for the increased cost of complying with the building code. It is a part of most National Flood Insurance Program policies.
 
To qualify ICC coverage, a building must be:
 

• Covered by a National Flood Insurance Program standard policy,
• Located in a Special Flood Hazard Area, also known as a regulatory floodplain,
• Below the base flood level, and
• Either "substantially damaged" or a "repetitive loss property."   

 
"Substantial damage" has occurred when the cost of restoring a structure to its pre-damage condition equals or exceeds 50 percent of the structure's pre-damage market value.
 
A "repetitive loss property" is one that has suffered two or more flood losses over 10 years with the cumulative cost of repairs equaling or exceeding 50 percent of the value of the structure.
 
A policyholder seeking ICC funding must file a claim that is separate from the basic claim for flood damages.
 
The total insurance payout including Increased Cost of Compliance coverage cannot exceed $250,000 for a residence or $500,000 for a non-residential structure.
 
Answers to general flood insurance questions are available from local floodplain administrators, the National Flood Insurance Program (1-800-427-4661), and insurance companies and agents. Information is also available at www.floodsmart.gov.