ICC, a Three-Time Flooded House, and Class 6 Arithmetic
Harrow (pop. 18,000) is an NFIP community and a CRS Class 6. A pre-FIRM single-family house in Zone AE carries a subsidized NFIP policy: building $250,000, contents $80,000. It has flooded three times in three years - claims paid of $62,000 and $78,000, and now a third loss causing $150,000 of damage to the building. The structure's market value is $180,000. The floodplain administrator has issued a written substantial damage determination and the owner holds a permit to elevate the house to BFE plus 2 ft for $130,000. The policy was in force on the date of loss and the adjuster has closed the third claim. The owner asks the permit clerk what else the policy will pay for.
1. Is the owner eligible for Increased Cost of Compliance, and what will it and will it not pay for?
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The threshold facts line up. The damage is $150,000 against a $180,000 structure value - 83%, far over 50% - so the community's written substantial damage determination is well supported. The policy was in force at the time of loss, the community has made the determination, and there is a paid flood claim. Those are the ICC triggers.
What ICC pays: up to $30,000 toward the cost of bringing the structure into compliance with the community's floodplain ordinance - elevation, demolition and debris removal, or relocation. Here it can be applied to the $130,000 elevation.
What it does not do:
- It does not cover ordinary repair of the flood damage; that is paid under the building coverage, subject to the $250,000 limit, the deductible, and the policy's loss settlement terms.
- ICC is in addition to the building limit - the $30,000 does not erode the $250,000.
- It does not cover improvements or amenities added during the elevation, and it will not cover the full $130,000. The owner must fund the remaining $100,000, typically with a mitigation grant, a loan, or personal funds.
- ICC is not automatic: the owner must submit a claim and complete the compliance work within the policy's timeframes, and the work must actually result in compliance.
Advise the owner in writing that the window is finite and that delays in starting the elevation can forfeit the ICC payment.
2. A council member asks what Class 6 actually buys and what moving to Class 5 would be worth. How should the administrator answer, and what activity cannot earn credit?
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Discount structure. CRS discounts step by 5% per class. Class 6 gives a 20% reduction on premiums for policies in the SFHA and 10% outside it; Class 5 gives 25% and 10%. The discount applies to the premium itself, so the value scales with the community's premium base.
Simple illustration. A $1,000 SFHA premium pays $800 at Class 6. At Class 5 it pays $750 - $50 more saved per policy. Multiply by the number of SFHA policies to get the community-wide figure, and note that it accrues every year the class is maintained.
What cannot earn credit. A community gets no credit for activities it is already required to perform as a condition of NFIP participation: issuing permits, reviewing and retaining elevation certificates, enforcing the ordinance, adopting the FIRM, making substantial damage determinations. Those are the baseline. Credit comes from going beyond: additional freeboard, higher regulatory standards, open space preservation, drainage maintenance, stormwater management, floodplain management planning, and outreach.
Practical warning. Credits must be documented and are verified on a cycle. If the community stops performing a credited activity - for example, stops enforcing the freeboard ordinance, or lets the open-space parcels be developed - it can lose the points and drop a class, raising every policyholder's premium. The CRS coordinator should treat credited activities as auditable commitments, not as a one-time application.
3. What is this property's likely repetitive-loss status, and what obligations and options follow for the community and the owner?
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Status. A repetitive loss property is generally one with two or more paid flood claims of $1,000 or more within any 10-year period since 1978. This house has three paid claims in three years, so it is a repetitive loss property and is on track to meet the severe repetitive loss criteria (four or more claims of $5,000 or more, with at least two in a 10-year period; or claims whose cumulative building payments exceed the building value).
Community obligations:
- FEMA notifies the community of listed properties; the community should maintain and use the list in permitting, outreach, and mitigation planning.
- Repetitive loss properties are addressed in the hazard mitigation plan and are prioritized for mitigation funding.
- The community must keep making and documenting substantial damage determinations - repeated flooding is exactly where the 50% test is most often missed.
Options for this owner: elevation is permit-ready and ICC-eligible, but three losses in three years at this depth suggests elevation may not fully solve the problem, and the structure may be a better acquisition candidate. Severe repetitive loss properties receive priority for FMA and PDM funding, and acquisition converts the parcel to permanent open space.
Advice: give the owner both paths with real numbers, warn that repeated repair without mitigation is the outcome most likely to repeat, and note that a future claim history of this kind can affect continued subsidized rating.