# What the Increased Cost of Compliance Modernization Act Does

This bill expands flood insurance coverage for homeowners who need to make repairs or upgrades to comply with local building codes and flood safety regulations. When a home is damaged by flooding, local governments often require owners to rebuild to higher standards—like elevating the structure, installing flood vents, or reinforcing walls. These compliance costs can be expensive and are often not covered by standard flood insurance. This bill creates a new insurance option to help pay for those mandatory upgrades.

Under the bill, homeowners with standard flood insurance would automatically get basic coverage equal to 20 percent of their maximum flood insurance limit. For example, if someone's maximum coverage is $250,000, they'd get an additional $50,000 available specifically for compliance costs. Homeowners who want more protection can pay an extra premium to increase this coverage up to 40 percent of their maximum limit—in this example, up to $100,000. This extra coverage is separate from regular flood insurance limits, so it doesn't reduce how much they can claim for actual flood damage to their home.

The bill also includes a special provision for people doing flood mitigation projects (like elevating their home or installing flood barriers). If a homeowner receives a government grant to help pay for these improvements but needs to contribute their own money as a requirement, they can now use payments from this new compliance coverage to cover that required contribution. This makes it easier for people to afford the local match needed to access federal mitigation assistance programs.

Increased Cost of Compliance Modernization Act of 2022

Rice, Tom

Increased Cost of Compliance Modernization Act of 2022 This bill increases insurance coverage available to structures in high-risk flood areas under the National Flood Insurance Program (NFIP), commonly known as Increased Cost of Compliance (ICC) coverage. ICC coverage applies to costs related to flood mitigation requirements for repairs to, or the rebuilding of, flood-damaged structures with existing NFIP coverage. Currently, ICC coverage is capped at $30,000. The bill increases this amount to 20% of the maximum amount of flood insurance coverage (currently $50,000) with additional coverage available of up to 40% of the maximum amount of coverage (currently $100,000). The bill removes the cap on ICC premiums and requires the premium amount to be calculated pursuant to other NFIP rates. Additionally, ICC coverage does not count towards the cap on overall NFIP coverage. Finally, ICC policyholders are allowed to assign the rights or benefits of this coverage to a governmental agency to satisfy certain cost-sharing requirements applicable to mitigation assistance programs.