Shuman Roy is an entrepreneur, business owner, and musician. He started RoysNoys, LLC in 2013 as a music production and education service company. He also offers small business consulting and advisory services to help businesses get from start-up mode to turn-key operations. Shuman earned his M.B.A from the Stern School of Business in 2001 and has an undergraduate degree from Manhattan College in ...

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Content Writer & Entrepreneur Shuman Roy

Joel Ohman is the CEO of a private equity-backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He has an MBA from the University of South Florida. Joel...

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Reviewed by Joel Ohman
Founder, CFP® Joel Ohman

UPDATED: Jun 28, 2022

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If you obtained a mortgage at any time since 1994, you likely noticed the “flood cert” charge on your Good Faith Estimate, the form that details your expected closing costs. It may also be listed as a “Flood Determination.” Generally, it’s only $10-$12, but its results determine how much you’ll need to spend on one part of your insurance.

This charge covers the process of determining whether your property is located in a flood zone or not, and the good news is it is usually nominal. Depending on your state and city, some are more likely to need flood insurance. Single family homeowners would need to buy it. Condo associations generally cover the flood insurance on their master policies.

If it turns out your home or business is located in a Special Flood Hazard Area (SFHA), you may have been required to obtain an “elevation certificate” as well.

If you’re here, you’re probably wondering what the document is, does, and most importantly…what it costs.

What is an elevation certificate?

  • A document that details the elevation of your property
  • In relation to the Base Flood Elevation (BFE)
  • Which is the height floodwater is forecast to rise
  • It ultimately dictates the cost of flood insurance

The elevation certificate is a document prepared by a land surveyor (or other licensed individual or company) that details the elevation of your home in reference to the Base Flood Elevation, which is also referred to as the “BFE.”

The BFE is the level at which flood waters will top out during a flood. If it turns out they’ll rise to levels that put your particular property in jeopardy, flood insurance may be required.

Depending on your level of risk, the premium may be quite expensive. Like any other form of insurance, the higher the risk, the higher the premium because there’s a greater likelihood of a claim being filed.

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Why do I need an elevation certificate?

  • If it is determined that your property is high-risk
  • With regard to potential flood damage
  • An EC may be required by an insurer
  • To help determine the cost of the associated premium

According to FEMA, the elevation certificate is “used to provide elevation information necessary to ensure compliance with the community floodplain management ordinances, to determine the proper insurance premium rate, and to support a request for a Letter of Map Amendment (LOMA) or Letter of Map Revision based on fill (LOMR-F).”

The good news is the EC might not need to be ordered new if a copy of it is available and it’s accurate.

If not, you might have to bear the cost, which can range from a couple hundred bucks to thousands, depending on the size, attributes, and location of the structure.

Again, if you are borrowing money to purchase a piece of property, whether personal or for business, your lender may require flood insurance in order to fund the loan if it’s located in a flood zone.

But it is also generally a good idea to have flood insurance even if not required by your bank, as homeowners insurance policies DO NOT COVER flood damage to your building or property. More importantly, in certain flood zones, FEMA assistance after a major flood-related disaster is contingent upon you having flood insurance through the National Flood Insurance Program(NFIP).

See: What is covered by flood insurance?.

What is a LOMA and LOMR-F?

  • If you feel the zoning is inaccurate
  • You can attempt to get the property re-zoned
  • To either lower your insurance premium
  • Or avoid flood insurance entirely

If your property is zoned in a flood plain, but you feel the zoning is inaccurate, you have the option to attempt to get the property re-zoned and avoid the insurance requirement or at least lower your premium.

The elevation certificate, assuming it demonstrates you are not subject to the flooding in your particular zone, would be your evidence to have the property re-zoned.

Thus, the “letter of map amendment,” which is the letter you write to the local flood plain manager, who can ultimately re-zone the property.

When it comes to the LOMR-F, you are typically dealing with land developers, or home builders. In some instances, builders will attempt to “fill” the land with more dirt (essentially) in order to have the entire development above the BFE (discussed earlier).

Once the fill is complete, the developer begins the process of attempting to have the property re-zoned to demonstrate that it’s above the BFE and therefore not subject to flood losses.

This process makes the property on the development much more desirable for end-user purchase and bank financing.

Note: Obtaining an elevation certificate does not provide a waiver of the flood insurance purchase requirement.

Basically, your lender will not allow you to forego the requirement for flood insurance simply by obtaining this document. It is up to them to require flood insurance regardless of the results of the elevation certificate.

Hopefully, your home is built above that level, as that would mean you’d be less likely to suffer a flood related loss on your property…which should drive down your flood insurance premium.

How much do flood insurance policies cost?

Individual insurance companies do not take on the risk of flood policies themselves. They may offer things like water backup coverage, which even individual condo owners should carry. Whether from a toilet, a neighbor’s overflowing bathtub, or something else, this can go a long way in protecting you.

Flood insurance rates are set by the NFIP. Then individual insurance companies sell and service the programs with the NFIP paying claims. Regardless of which insurance company you go to as a property owner, the rates for your residence should be the same.

Not sure if you need flood insurance? Click to find out where to buy flood insurance.