Flood Insurance Option Helps with Repair Costs

Under the National Flood Insurance Program (NFIP), Nebraskans who bought flood insurance that was in effect at least 30 days before the May 22-June 24 period of storms and flooding, may qualify for funds to help repair and flood proof damaged buildings.

An Increased Cost of Compliance (ICC) provision is written into all NFIP policies purchased or renewed since June 1, 1997. The program allows up to $30,000 to offset the costs of mitigation or of relocating a home or business. The damaged structure must be in a High Risk Flood Zone "A" and the total claim, including the ICC funds, cannot exceed the policy maximum.

"The ICC provision will make it more likely policy holders are financially able to take steps to reduce flood losses in the future," said Federal Coordinating Officer Willie Nunn of the Federal Emergency Management Agency (FEMA)-the agency that manages NFIP. "The funds may not cover all the costs of repairing or moving a structure but the person who takes advantage of the provision, insures their home or business and its surroundings are more secure."

ICC claims are adjusted separately from flood damage claims. Homeowners and businesses can file an ICC claim if there is "substantial flood damage" or "repetitive damage" as determined by the appropriate local government agency. This assessment is made when the owner applies for a permit to make repairs. Once the local government has confirmed damage is substantial or repetitive, the policyholder should call his or her insurance agent to file an ICC claim.

Substantial damage is defined as a structure so destroyed by flooding, repairs will cost 50 percent or more of the building's pre-flood market value. Repetitive damage means the property had flood damage at least twice in the past 10 years and repair costs were 25 percent or more of its market value at the time of flooding.

ICC funds can be used to elevate a building to, or above the flood level adopted by the community, to relocate a building out of the floodplain, to flood proof non-residential buildings, or to demolish a damaged building. Repairs and mitigation done under this program must be in accordance with local building codes and comply with local floodplain ordinances.