Although Superstorm Sandy occurred over five and a half years ago, FEMA is still issuing bulletins regarding flood insurance coverage issues. The most recent bulletin addresses Increased Cost of Compliance (“ICC”) coverage.
For those with flood insurance under the Standard Flood Insurance Policy (SFIP), the SFIP provides ICC coverage to pay up to $30,000 towards the cost of floodproofing (non-residential only), relocating, elevating, or demolishing an insured building required to become compliant with state or local floodplain management laws or ordinances following a flood loss.
The time frame to complete the ICC work is typically six years from the dates of loss.1
Recognizing that this deadline is approximately six months from now and some policyholders with Superstorm Sandy claims have not yet completed the compliance work, FEMA has extended the deadline for another three years as stated in Bulletin No. W-18010 dated April 11, 2018:
Most policyholders required to bring their properties into compliance with their communities’ floodplain management laws following Superstorm Sandy have completed the required work and received appropriate compensation under their SFIP’s ICC coverage.
However, a small number of policyholders has not completed the required compliance work due to external factors beyond their control, such as participation in the Sandy Claims Review, various recovery grant programs, or delayed substantial damage declarations in some communities.
To provide these policyholders with a reasonable opportunity to complete their ICC claims, I am extending the deadline for completing ICC claims from Superstorm Sandy by an additional three years.
ICC coverage is significant because it helps policyholders cover the costs of meeting certain requirements in their community to reduce future flood damage before they repair or rebuild. With this extension, Superstorm Sandy policyholders may now complete their ICC claims no later than the nine-year period following the date of loss.
1 See SFIP Art. III.D.5.e.(2) (requiring completion of ICC work within two years of date of loss); WYO Bulletin W-15038 (Aug. 10, 2015) (extending deadline for completing ICC work to six years from date of loss for all losses occurring on or after January 1, 2011); https://www.propertyinsurancecoveragelaw.com/2015/08/articles/insurance/time-limit-to-complete-increased-cost-of-compliance-work-on-flood-claims-extended-to-sixyears/