Flood certificates are documents used to help property owners understand their flood risk and how it may affect flood insurance requirements and pricing. The two most commonly referenced flood certificates are flood zone determination letters and elevation certificates. While they are often confused with one another, each serves a different purpose and can impact flood insurance decisions in different ways.
At The Flood Insurance Guru, one of the most common statements we hear is, “I already have an elevation certificate,” only to find that the document is actually a flood zone determination. Understanding the difference between these certificates can help you avoid unnecessary costs and better evaluate your flood insurance options.
This video explains what flood certificates are, how they work, and when you may need one.
What is a Flood Zone Determination Letter?
A flood zone determination letter identifies the flood zone in which a property is located based on data from the National Flood Insurance Program (NFIP) and FEMA’s Flood Insurance Rate Maps (FIRMs). To generate this letter, a property address is reviewed through the NFIP mapping system, which assigns the property to a specific flood zone.
Your flood zone helps determine the level of flood risk your property faces and whether flood insurance may be required by a mortgage lender. It also plays a role in estimating flood insurance premiums under the NFIP.
Flood zones can change over time as FEMA updates flood maps. Because of these updates, it is important to review your flood zone periodically, especially if you are buying or selling a home, refinancing, or renewing a flood insurance policy.
How Flood Map Changes Affect Insurance Rates
Updates to Flood Insurance Rate Maps can directly affect flood insurance premiums. If a property is moved from Flood Zone A to Flood Zone AE, insurance costs may increase due to higher risk classification.
Premium increases can vary depending on how close the property is to a Special Flood Hazard Area (SFHA) and its relationship to the base-flood elevation. In some cases, rate increases may range from six to eleven percent.
A flood zone determination letter may also confirm whether a property is located within the SFHA. If it is, additional documentation, such as an elevation certificate, may be considered.
How Flood Map Changes Affect Insurance a
What is an Elevation Certificate?
An elevation certificate is an official document that shows a building’s elevation in relation to the base-flood elevation (BFE). The BFE represents the estimated height floodwaters may reach during a one-percent annual chance flood.
Unlike flood zone determination letters, elevation certificates are not free. They typically cost between $500 and $2,000 and must be prepared by a licensed land surveyor or professional engineer. In many situations, an elevation certificate is optional and not required.
Whether an elevation certificate is necessary depends on where the structure sits relative to the base-flood elevation and whether a BFE has been established for the property’s flood zone.
How Elevation Certificates Impact Flood Insurance
Elevation certificates help homeowners and the NFIP evaluate flood risk more accurately. If a building’s lowest floor is below the base-flood elevation, flood insurance premiums can increase significantly. Even a small difference in elevation can affect insurance costs.
However, elevation certificates can also work to a homeowner’s advantage. If a property is located in a high-risk flood zone but is built above the base-flood elevation, an elevation certificate can demonstrate reduced flood risk. This may lead to lower NFIP flood insurance premiums and a positive impact on property value.
It is important to note that most private flood insurance companies do not require elevation certificates, and these documents may not significantly affect private flood insurance rates.
Do You Really Need a Flood Certificate?
Not every property requires an elevation certificate. In many cases, a flood zone determination letter provides enough information to understand flood risk and insurance requirements.
Before ordering an elevation certificate, it is best to consult with a flood insurance professional who can determine whether the document will provide a meaningful benefit based on your specific situation.
Final Thoughts on Flood Certificates
Flood certificates are valuable tools for understanding flood risk, insurance requirements, and potential costs. Knowing the difference between flood zone determination letters and elevation certificates allows property owners to make informed decisions and avoid unnecessary expenses.
Flood education and mitigation planning can help protect your property over the long term. Being informed today can make a significant difference when flooding occurs.
