Flood Insured Could Receive Up to $30,000 in More Aid

December 12, 2005

Owners of homes and businesses who have been declared substantially damaged by their community from flood damages caused by Hurricane Katrina or Rita and who have flood insurance through the National Flood Insurance Program (NFIP) may be eligible for an additional $30,000 in Increased Cost of Compliance (ICC) funds to bring their home or business into compliance with floodplain ordinances. The U.S. Department of Homeland Secsurity’s Federal Emergency Management Agency (FEMA) administers the NFIP, including the ICC program.

“The Increased Cost of Compliance program is a good opportunity for home and business owners to invest in mitigation techniques to reduce the likelihood of future flood damage,” said Federal Coordinating Officer Scott Wells. “With ICC funding, communities will be rebuilt stronger and safer.”

Local floodplain ordinances may require changes to buildings that have been repeatedly or severely damaged by flooding. ICC benefits can be used to help pay for these required improvements.

ICC funding can be used for one of four actions to bring property into compliance with local floodplain ordinances:

* Floodproofing (primarily for non-residential buildings) – Making a building watertight through a combination of adjustments or additions of features to the building
* Relocation – Moving a home or business out of the flood zone
* Elevation -Raising a home or business to or above the flood-elevation level adopted by the local community
* Demolition – Tearing down and removing flood-damaged buildings.

Individuals can file ICC claims in two instances:

* Substantial damage – The local community determines the home or business is so damaged by the flood that repairs will cost 50 percent or more of the building’s pre-damage value.
* Repetitive damage – The local community must have a repetitive loss provision in its floodplain management ordinance and must determine that the home or business was damaged by a flood twice in the past 10 years. The cost of repairing the damage must on average equal or exceed 25 percent of the building’s market value at the time of the flood. There must have been a flood insurance claim payment for both losses.

ICC claims must be filed separately from flood damage claims under standard flood insurance policies. Money available through an ICC claim is in addition to claim settlement from a flood insurance policy.
Once the local community determines the home or business to have suffered substantial or repetitive damage, owners should contact the insurance company or agent who wrote the flood policy. The insurer will assign a claim representative who will help process the ICC claim.

After initiating the claims process, individuals should get estimates from contractors for planned mitigation activities. A partial ICC claim payment can be made to the policyholder, and full payment will be made once the work is completed and documented as in compliance with the local floodplain management ordinance. ICC funds can be augmented with low-interest Small Business Administration disaster loans

Property owners living in areas participating in the NFIP can purchase flood insurance from most major insurance carriers who sell homeowners or business policies or by calling the National Flood Insurance Program at 1-800-427-4661.

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