Elevation Certificates – Do I need one?
Under Risk Rating 2.0, an elevation certificate is no longer required to obtain flood insurance
through FEMA’s National Flood Insurance Program (NFIP). However, this optional document may still serve a purpose for your clients who are looking for a way to reduce their flood insurance premiums.
What is an elevation certificate?
An elevation certificate is an official document used to certify specific elevation measurements for a property. It is to be completed by “a land surveyor, engineer, or architect who is authorized by law to certify elevation information”. They will take vertical measurements of a structure and property, including:
Top of the bottom floor
Top of the next higher floor
Attached garage slab level
Lowest elevation of machinery serving the building
Lowest and highest adjacent grades next to the building
All of these measurements are considered in respect to the Base Flood Elevation (BFE), which is defined as the elevation of surface water that has a 1% chance of equaling or exceeding that level in a given year. Essentially, the elevation certificate is a way to measure a building’s propensity for flood damage, based on the expected level of potential flood waters. An area’s likelihood of flooding is captured in its flood zone designation, which is determined by a separate analysis.
Why does Risk Rating 2.0 no longer require elevation certificates?
FEMA now utilizes several factors, including third-party data sources, to determine a home’s flood risk. Previously, the elevation certificate, supplied by the property owner, was the primary tool for determining the NFIP premium. Private sector data sets, catastrophe models, and evolving actuarial science now figure into the equation, along with the estimated cost to rebuild a structure. FEMA states that this is meant to be a more equitable approach to pricing flood insurance:
Currently, policyholders with lower-valued homes are paying more than their share of the risk while policyholders with higher-valued homes are paying less than their share of the risk. Because Risk Rating 2.0 considers rebuilding costs, FEMA can equitably distribute premiums across all policyholders based on home value and a property’s unique flood risk.
While no longer necessary to purchase an NFIP policy, an elevation certificate may, in some circumstances, help to lower your client’s flood insurance premium.
Elevation certificates can lower flood insurance rates?
Your client can submit an elevation certificate to you in order to request consideration for a lower NFIP rate. Remember that Risk Rating 2.0 utilizes a number of data sources to determine a home’s elevation relative to the Base Flood Elevation. However, if an elevation certificate presents more favorable measurements, then a lower insurance rate may apply. According to FEMA:
Should your client choose to obtain an Elevation Certificate, each year at the time of renewal, review the rate they would get utilizing the certificate. Insurance agents are responsible for determining the best rate and coverage for their clients, so this is a vital step that must be done every year.
Where do you get an elevation certificate?
Your client can check for an existing elevation certificate with the:
As described above, authorized land surveyors, engineers, and architects may be hired to perform the necessary measurements, although if an existing elevation certificate can be tracked down, it may save your client the additional cost.
EZ Flood doesn’t require an elevation certificate
Aon Edge offers EZ Flood as an alternative to the NFIP, and our product is unaffected by Risk Rating 2.0. Elevation certificates were not required before, nor are they necessary now. If you are looking for a flexible and comprehensive private flood insurance option, we may be able to help.
This article is provided for general informational purposes only and is not intended to provide individualized advice. The article is not a replacement for any NFIP publications.