Final answer:
Increased Cost of Compliance provides coverage up to the maximum allowable limit set by the insurance policy agreed upon. This coverage is typically provided under the National Flood Insurance Program (NFIP) and is designed to protect property owners from the expenses associated with bringing a building into compliance with local floodplain regulations.
Step-by-step explanation:
Increased Cost of Compliance provides coverage up to the maximum allowable limit set by the insurance policy agreed upon.
This coverage is typically provided under the National Flood Insurance Program (NFIP) and is designed to protect property owners from the expenses associated with bringing a building into compliance with local floodplain regulations.
For example, if a homeowner's policy has an Increased Cost of Compliance coverage limit of $100,000, then the insurance company would cover up to $100,000 in expenses for activities such as elevating a property or relocating it to a less flood-prone area.