Which of the following statements about increased costs of compliance (ICC) coverage is FALSE?

The statement indicating that a separate deductible of $500 applies to increased costs of compliance (ICC) coverage is inaccurate. In actuality, ICC coverage does not have a separate deductible; instead, it is designed to address additional costs that arise from a legal obligation to bring property into compliance with current building codes or ordinances following a flood-related loss.

ICC coverage is an important component because it assists property owners in meeting the requirements imposed by new codes when they rebuild, ensuring that the newly constructed or repaired property meets safety and zoning guidelines.

The other statements about ICC coverage reflect accurate information. It is indeed part of a standard flood policy, which is significant because it ensures that policyholders have protection against these specific costs when facing rebuilding challenges. Additionally, ICC coverage can provide critical financial support for necessary upgrades to meet compliance, making it an essential feature of flood insurance. However, while ICC coverage offers substantial benefits, it does come with specific limits, which distinguishes it from having "no limits on amount."