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How Does Increased Cost of Compliance Work After Major Flooding?

Last updated October 26, 2026

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The short answer

What Is Increased Cost of Compliance

Increased Cost of Compliance, often called ICC, is a part of flood insurance that helps cover the cost of bringing your home into compliance with local flood ordinances after a flood. This usually applies when your home has been substantially damaged, meaning the damage is more than half the home's value. The goal is to reduce future flood risk by elevating, relocating, or demolishing the structure.

ICC is not a separate policy you buy. It is built into most standard flood insurance policies, but it only activates under specific conditions. You must have flood insurance before the flood occurs, and your community must have adopted floodplain management rules. The coverage pays only for the compliance work, not for repairing the flood damage itself.

  • Covers elevation, relocation, or demolition costs
  • Applies after substantial flood damage
  • Requires a flood insurance policy in place before the flood
  • Pays only for code compliance, not general repairs
  • Has a maximum limit, often $30,000, but check your policy

How to File an Icc Claim

To use ICC coverage, you first file a regular flood insurance claim for the damage. The adjuster assesses the damage and determines if your home meets the definition of substantial damage. If it does, your community's building official must issue a letter stating that your home must be brought into compliance. This letter is key to triggering ICC.

You then submit that letter to your insurance company along with an ICC claim form. The insurance company checks the details and decides if the work qualifies. You may need to get bids from local contractors or pros for the elevation or other work. Keep copies of everything and track deadlines, as there are time limits for filing ICC claims.

What Costs Are Covered

ICC pays for the necessary work to make your home compliant, such as raising it above the base flood elevation, moving it to a safer location, or in some cases, demolishing it. It can also cover the cost of building permits and minor site work directly tied to the compliance project. However, it does not pay for contents, temporary housing, or unrelated upgrades.

The coverage has a cap, which is typically $30,000, but that can vary. If the compliance work costs more, you are responsible for the difference. The amount you receive depends on your policy limits and the specific work required. Policies vary, and your insurer decides what is covered.

How Icc Interacts with Your Flood Claim

Your regular flood claim pays to repair the flood damage, while ICC pays separately for the compliance work. These are two distinct payments, but both come from the same flood insurance policy. You do not need to choose one over the other; you can receive both, as long as you meet the criteria for each.

The total of your flood claim and ICC payment cannot exceed your policy's building coverage limit. For example, if your building coverage is $250,000, and the flood damage repair costs $220,000, you often have only $30,000 left for ICC. This depends on your specific policy limits and how the damage is assessed. You need to plan carefully and talk with your insurance company about how the limits apply.

Steps to Take After Major Flooding

After a major flood, document all damage with photos and written notes. Contact your insurance company right away to start the claims process. Do not throw away damaged items until the adjuster has seen them. If you live in Bellingham, keep your flood insurance policy documents in a safe, dry place for easy access.

You should also contact your local building department to ask about floodplain regulations and whether your home is considered substantially damaged. They will guide you on the compliance process. The pros who handle flood cleanup and restoration can help with emergency water removal, but the compliance work itself is a separate project that may require a contractor.

  • Document damage with photos and a written list
  • File your flood insurance claim promptly
  • Ask your building department about substantial damage rules
  • Get bids from qualified contractors for compliance work
  • Track all deadlines and correspondence with your insurer

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Frequently asked questions

Does ICC coverage apply to all flood insurance policies?

Most standard flood insurance policies through the National Flood Insurance Program include ICC coverage, but it is not automatic in every case. You should check your policy documents to confirm. Private flood insurance may differ. Policies vary, and your insurer decides what is covered.

Can I use ICC money to rebuild in the same spot?

No, ICC is meant to reduce future flood risk. It pays for elevation, relocation, or demolition, not rebuilding in the same flood-prone location. You may rebuild after elevating the home, but the work must meet local flood codes. Your community's building official decides what is compliant.

What if I do not have flood insurance?

Without flood insurance, you likely have no ICC coverage. Federal disaster grants may help with some mitigation costs, but they are limited. You can still take steps to reduce future risk, such as elevating utilities or installing flood vents, but you will pay for those yourself. Check your policy for any other options.

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