Depending on where you live, flood insurance could be mandatory. In order for your insurance provider to calculate your home’s amount of flood risk, you might be required to get an elevation certificate. But what is an elevation certificate?
An elevation certificate is a verification of how at risk your home is for flooding. The elevation certificate will take into account important factors like home location, flood zone, materials used in construction, and lowest floor elevation. The lowest floor elevation might be the most important factor that determines your home’s rating. If your elevation certificate determines your lowest floor to be at risk of flooding, your insurance premium will go up.
Insurance companies use the elevation certificate to determine your flood insurance premiums. The better chance your home has of flooding, the higher your premium. The elevation certificate is issued by the National Flood Insurance Program (NFIP) which is a federal insurance provider. If you purchase your insurance through them, the elevation certificate will be required.
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Is the elevation certificate required?
In most cases, the elevation certificate is not required. Some homeowners, however – especially those in areas of high flooding – might find it to be necessary to purchase a mortgage or insurance. There are three conditions that your house must meet before you’re required to have an elevation certificate.
- If your mortgage is supplied by a federally backed lender. If you purchased your mortgage through a federal company – depending on who – you may be required to have an elevation certificate before settling on the mortgage.
- If the NFIP backs your flood insurance. Often times a private insurance company will offer flood insurance in their name whilst being backed federally. Check your insurance company to see if they supply insurance backed by the government or if they’re truly a private organization.
- If your home is in a Special Flood Hazard Area. Homes that are in zones where flooding can occur relatively frequently are oftentimes required to have an elevation certificate. Insurance companies might refuse to offer a policy without an elevation certificate.
If your situation does not meet all three conditions, it’s likely that you will not need an elevation certificate. Special situations do apply, and some mortgage lenders will require an elevation certificate regardless of your home’s location. Speak with your insurance agent to find out if your provider requires an elevation certificate.
How to obtain an elevation certificate
Obtaining an elevation certificate can be as easy as contacting your local surveyor. Sometimes you’ll be able to call your municipal government to find out if your home has a certificate on file. If this is not the case, you’ll have to pursue one yourself.
Call your local surveyor, engineer, or architect to come inspect your home and provide an elevation certification. They must be qualified to offer elevation certificates. The cost can vary from $200-$5,000 but the decrease in your insurance premiums or the discounts offered could be worth it. Get quotes locally to find the best options and the lowest price for your elevation certification.
Elevation certificates can be helpful
Even if your home does not require an elevation certificate, seeking one out may be a smart option. Insurance companies offer premiums to clients based on the likelihood of them paying out for repairs. If your home lies in an at-risk area, your insurance premium will be higher. If you live in an area that rarely floods, you have a chance of decreasing your premiums.
An elevation certificate is proof to your insurance company that your home is either more at risk or less. Reducing your premiums can be as easy as showing your insurance provider that your home is at low risk of flooding. If your lowest level has less than a 1% chance of flooding throughout the year, then your home is not in a Special Flood Hazard Area.
Another benefit of the elevation certificate is insurance discounts. Many insurance providers will offer homes a discount for having an elevation certificate. Some policyholders could see a discount of up to 40% of their premiums. Keep in mind that if your home is more at risk, you will have higher premiums, but you may qualify for more discounts as well.