What is an Elevation Certificate

Buying the correct insurance for your house is vital to get insurance coverage for all the possible risks. However, you will not be able to do it efficiently if you don’t have the proper knowledge of your area.

For instance, obtaining an Elevation Certificate issued by National Flood Insurance Program (NFIP) is vital if you live in a flood-prone area. The certificate will help you obtain proper flood insurance.

Flood insurance is an important consideration for property owners, especially those located in flood-prone areas. An Elevation Certificate is a crucial document used in determining flood insurance premiums.

In this article, we will delve into the basics of an Elevation Certificate, why it is important, and how it is used in calculating flood insurance premiums.

Understanding Elevation Certificate

An Elevation Certificate is a document that provides information about a property’s elevation in relation to the base flood elevation (BFE). The National Flood Insurance Program (NFIP) is the agency that issues this certificate. NFIP  is managed by the Federal Emergency Management Agency (FEMA). The Elevation Certificate contains important details about the property’s location, flood zone, building characteristics, and lowest floor elevation.

• Location and flood zone: The Elevation Certificate includes information about the property’s location and the flood zone designation by FEMA. Flood zones are categorized based on the level of flood risk, with higher-risk zones typically having higher flood insurance premiums. If you don’t know whether your property is in a high flood-risk area, you can check their site’s FEMA flood insurance rate map. Zones in the map designated as an “A” or “V” are Special Flood Hazard Areas. While there are many other conditions, the bottom line is that if your property is in A or V zone, then you are in a Special Flood Hazard Area.
• Building characteristics: In some cases, the certificate will also have unique features of the property. This might be your garage or any other structure that might have an effect on the building’s flood risk.
• Lowest floor elevation: The Elevation Certificate provides the lowest floor elevation of the property. This is because the lowest floor is typically the most vulnerable to flooding. It is one of the most important factors that will directly affect your flood insurance premium. This is compared to the BFE, which is the estimated elevation at which floodwaters have a 1% chance of reaching in any given year. The difference between the lowest floor elevation and the BFE is used to determine the flood insurance premium.

What is the Importance of an Elevation Certificate?

If you are planning to get flood insurance in a flood-prone area, there is a very high chance that you will need to provide an elevation certificate to your insurance agency.

Insurance agents use the Elevation Certificate to assess the property’s flood risk and then calculate flood insurance premiums accordingly. Hence, the Elevation Certificate becomes a vital tool for flood-prone areas.

Here are a few reasons why it is important to have an Elevation Certificate:

• Requirement for certain property purchases: You might require an Elevation Certificate if your property purchase is financed by a mortgage from a federally regulated or insured lender located in a Special Flood Hazard Area (SFHA) designated by FEMA. They usually require to assess the property’s flood risk and determine the appropriate flood insurance premium.

• The basis for flood insurance premium calculation: The Elevation Certificate provides crucial information used in calculating flood insurance premiums. The lowest floor elevation of the property is compared to the BFE to determine the property’s vulnerability to flooding. The higher the lowest floor elevation is above the BFE, the lower the flood insurance premium is likely to be, as it is considered less risky.
• Exceptions for certain structures: There are exceptions to the Elevation Certificate requirement for certain structures, such as buildings constructed before the establishment of a flood insurance rate map. These structures may be eligible for subsidized flood insurance rates without the need for an Elevation Certificate. However, as the NFIP raises its annual premium for subsidized policies, the advantage of subsidized rates may be diminishing.

Do You Really Need an Elevation Certificate?

1. While Elevation Certificate is a crucial tool and has a lot of property information, it is only essential in certain cases.
2. If your property and flood insurance purchases meet all three of the following conditions, your insurer will require you to provide an elevation certificate:
3. If your property is financed by a mortgage from a federally regulated or insured lender.

So that is all about Elevation Certificate. It is a vital document for people who want to get flood insurance in flood-prone areas. You can go to the FEMA site and check if your property lies in Special Flood Hazard Area. We hope this guide helps you to understand flood insurance and Elevation Certificates.