Under NFIP, if a structure has suffered two flood losses paid by the NFIP within a 10-year period, the cost of each repair must equal or exceed what percent of the market value for increased cost of compliance coverage to apply?

Under NFIP, if a structure has suffered two flood losses paid by the NFIP within a 10-year period, the cost of each repair must equal or exceed what percent of the market value for increased cost of compliance coverage to apply?

• A. 10%
• B. 25%
• C. 50%
• D. 75%

Answer: (B)

In NFIP, Increased Cost of Compliance (ICC) covers the costs to bring a flood-damaged building into compliance with floodplain regulations (like elevating, relocating, or demolishing). When a structure has had two NFIP flood losses within a 10-year period, ICC only applies if the cost to repair each loss equals or exceeds 25% of the structure’s market value before the damage. This threshold targets repetitive-loss situations, ensuring ICC funds go toward substantial, compliance-related improvements rather than small repairs. So, if each repair costs at least 25% of market value, ICC can apply (up to the policy limit, typically $30,000). For example, with a market value of $200,000, each repair would need to be at least $50,000 to trigger ICC eligibility.

In NFIP, Increased Cost of Compliance (ICC) covers the costs to bring a flood-damaged building into compliance with floodplain regulations (like elevating, relocating, or demolishing). When a structure has had two NFIP flood losses within a 10-year period, ICC only applies if the cost to repair each loss equals or exceeds 25% of the structure’s market value before the damage. This threshold targets repetitive-loss situations, ensuring ICC funds go toward substantial, compliance-related improvements rather than small repairs. So, if each repair costs at least 25% of market value, ICC can apply (up to the policy limit, typically $30,000). For example, with a market value of $200,000, each repair would need to be at least $50,000 to trigger ICC eligibility.