What is Increased Cost of Compliance coverage on a flood policy in Brevard County, Florida?

Increased Cost of Compliance (ICC) is a National Flood Insurance Program benefit of up to $30,000 that helps pay to bring a flood-damaged building into line with local floodplain rules. It can matter for Space Coast homes in flood zones.

When a Brevard County home takes serious flood damage, the repair bill is only part of the story. If the city or county decides the damage was substantial, the rebuild may have to meet current floodplain requirements, and that can add costs that a standard repair claim does not cover.

That is the gap ICC is designed to address. Here is what the program says about who qualifies, what the money can be used for, how the claim works, and what to ask your insurance professional if you are buying in Melbourne, Merritt Island, Cocoa Beach, Satellite Beach, Indialantic, or elsewhere on the Space Coast. I am a REALTOR, not an insurance agent, so ask your agent how your policy handles this.

What does ICC pay for?

FloodSmart, the National Flood Insurance Program's consumer resource, says ICC is coverage of up to $30,000 for policyholders in high-risk flood areas. Its page on reducing future flood damage explains that it covers the cost of bringing a home or business into line with the local floodplain management ordinance or regulations after flood damage.

The program lists four options a policyholder can choose from: elevation, relocation, demolition, and floodproofing. It notes that floodproofing mainly applies to non-residential buildings.

What triggers ICC?

Your community must declare the building substantially or repetitively damaged. FloodSmart defines substantial damage as repair costs reaching 50 percent or more of the building's pre-damage market value. Repetitive damage means the community has a repetitive loss provision, and the building flooded twice in 10 years with average repair costs of at least 25 percent of market value each time, with a flood insurance claim payment for each loss.

The program's agent claims resource adds that an eligible policyholder holds a Standard Flood Insurance Policy, has a building in a Special Flood Hazard Area, has a building official's determination that the property is substantially or repeatedly damaged by floods, and has not reached the program's $250,000 payment limit.

How does the ICC claim work?

Step What the program says
Determination The community makes the substantial or repetitive damage determination, which happens when you apply for a building permit
Claim The ICC claim is adjusted separately from your flood damage claim and filed with your insurer after the determination
Advance Up to $15,000 may be paid in advance once the signed contract, permit, and signed ICC Proof of Loss are submitted; if the work is not completed, the advance must be repaid
Final payment Issued after local officials inspect the work and you submit a certificate of occupancy or confirmation letter

How is ICC connected to the 50% rule?

The 50 percent threshold that triggers ICC is the same idea local governments use for substantial damage. The Florida Division of Emergency Management's market value guidance defines substantial damage as damage from any cause where the cost to restore the structure equals or exceeds 50 percent of its market value before the damage. When a building crosses that line, it must be brought into compliance with the flood-resistant requirements of the Florida Building Code and the local ordinance.

ICC is the insurance side of that requirement. It does not replace the repair claim, and it is not a promise that $30,000 will cover the full compliance cost. It is a capped benefit with its own claim process.

Can you give ICC funds to your community?

Yes, in a limited way. The program's claims resource says a policyholder can assign the payment to the local community through the Assignment of Coverage Disclosure form. The local official then submits it to FEMA and the National Flood Insurance Program with a Substantial Damage Notice.

What should Space Coast buyers ask before closing?

  • Is the home in a Special Flood Hazard Area? Check the address on the FEMA Flood Map Service Center.
  • Does the flood policy I am quoting include ICC, and what is the limit?
  • Has the home ever had a flood claim or a substantial damage determination?
  • What does my city or county floodplain office say about repairs and rebuilds in this location?
  • Should I budget for the possibility that compliance costs exceed the ICC limit?

Frequently asked questions

How much is the Increased Cost of Compliance limit?

Up to $30,000, according to FloodSmart and the program's agent resources.

Does ICC replace my regular flood claim?

No. FloodSmart says the ICC claim is adjusted separately from your flood damage claim.

Who decides if my Brevard County home is substantially damaged?

Your community's building official makes the determination, which the program says happens when you apply for a building permit.

My partner Nichole and I got your back. Reach out anytime at (321) 212-7676 or www.livingspacecoast.com.