Many property owners are finding themselves in need of something called an Elevation Certificate after receiving notification from their lenders that they are potentially in a flood hazard area. Without an Elevation Certificate, flood insurance premiums are usually rated in the highest tier, because they assume the highest risk in the absence of better information.
The first and most critical component of an Elevation Certificate is the flood zone that the property is located in. In the southeast, most property is in one of three zones: X, A, and AE. Zone X is classified as areas that are outside of the 100 year flood plain. This is the best place to be! Zones A and AE are areas with a 1% annual chance of flooding (thence statistically probable to flood once every 100 years and our term 100 year flood plain). FEMA reflects that areas in an A or AE zone have a 26% chance of flooding over the life of a 30 year mortgage, as compared to only a 4% chance of fire damage in the same time period.
Zones A and AE are usually shaded and clearly labeled on Flood Insurance Rate Maps (“FIRMs”). The boundaries of A zones are estimated from aerial photography, historical flooding limit data, and USGS topographic maps. No FEMA sponsored detailed analysis has been performed in A zones. AE zones are different in that FEMA has performed a detailed analysis and determined the base flood elevations (“BFE”) along flood prone streams. It is very common for Zone A boundaries to be impractical and much larger than the actual flood plane. Subsequently, many properties are within mapped A zones but outside the actual flood plain, which creates seemingly unnecessary hardships on affected property owners.
Elevation Certificates require several elevation or vertical measurements of the affected structures. The process that calculates flood insurance premium amounts takes all of the differences in elevations into account and determines a premium that is based on a weighted likelihood of damage in the event of a flood event. Also required is an inventory and certification of flood openings (or “flood vents”) in crawl spaces or basements. Flood vents are used to allow passage of flood waters in and out of these areas of structures to avoid wall failure from hydrostatic pressure. Such hydrostatic pressure can be caused from flood waters trying to get into a structure during the event, or trapped flood waters trying to get out of a structure after the water has receded.
Insurance premium amounts are often improved after an Elevation Certificate has been completed on a structure in Zone AE, because the elevations are related directly to the base flood elevation. Unfortunately, the reported elevations have much less effect on premiums for structures in (unstudied) A zones. This can understandably cause frustration and disappointment in the property owners. Many property owners in Zone A find it to their benefit to have a detailed analysis (or “flood study”) performed on their property in order to have a base flood elevation entered in their Elevation Certificate.