We are asked this all the time and rightfully so. You are told you need to buy a flood insurance policy, which is separate from your homeowner’s policy. And then you are told you need a separate elevation certificate to calculate the proper premium. Or maybe you already have flood insurance and you were told getting a proper elevation certificate could lower your rising premium. So what does the elevation certificate cost?
Who doesn’t want to lower the cost of… everything? Flood insurance is one of those things where consumers might feel a little helpless because most flood insurance is issued through the Federal Emergency Management Agency (FEMA) so the rates are what they are. First, find a knowledgeable agent that really knows the National Flood Insurance Program. Second, check out our list of the top 5 ways to lower your premiums.
#1 Get an Elevation Certificate
When the Biggert Waters Act of 2012 (BW12) was passed, one of Congress’ goals was to allow for lender acceptance of private flood insurance policies to satisfy the mandatory purchase requirement. The Act contained vague language, and it took lending regulators seven years to finalize a rule for lenders to follow. Prior to the lending regulators creating the final rule, many lenders didn’t accept private flood policies as they were uncomfortable verifying compliance with the BW12 definition and worried about noncompliance fines and collateral protection.
If you are like me, when the newly formatted NFIP Flood Insurance Manual came out on October 1st, you probably thought, “Well great! Now I have to start all over again learning this manual.” I’ve been using the NFIP Flood Insurance Manual for over 16 years and have learned through long experience where to find certain flood insurance topics. I certainly didn’t relish having to re-learn where to find information. Despite the new format being more logical and following a transaction-by-transaction path through the lifecycle of a flood insurance policy, my first impulse was to cringe and curse.
If you are like me, when the newly formatted NFIP Flood Insurance Manual came out on October 1st, you probably thought, “Well great! Now I have to start all over again learning this manual.” I’ve been using the NFIP Flood Insurance Manual for over 16 years and have learned through long experience where to find certain flood insurance topics. I certainly didn’t relish having to re-learn where to find information. Despite the new format being more logical and following a transaction-by-transaction path through the lifecycle of a flood insurance policy, my first impulse was to cringe and curse.
The Federal Emergency Management Agency’s (FEMA) “Clear Communication Initiative” is intended to inform federal flood insurance policyholders of their flood risk as reflected on the most current Flood Insurance Rate Map (FIRM). This is something congress mandated in the Homeowner Flood Insurance Affordability Act (HFIAA, and specifically Section 28 of that Act). The reasoning is sound, but there are parts that may be confusing, so I want to try and explain “Clear Communications”.
So you finally did it. You saved up enough money to put a down payment on your first home, and pay closing costs. You spent hours completing paperwork, and gathering documents for your mortgage lender.
In early 2016, FEMA began mailing out clear communication initiative letters to flood insurance policyholders with new policies effective April 1, 2016 or later, and/or renewal dates of October 1, 2016 or later. The purpose of these letters was to inform the policyholders of their current, re-mapped flood risk rating, and explain how that rating was assessed, as well as how it would likely impact what one would pay for flood insurance. The letters further explain how the property owner may reduce flood insurance premiums by obtaining an Elevation Certificate.
Who doesn’t want to lower the cost of… everything? Flood insurance is one of those things where consumers might feel a little helpless because most flood insurance is issued through the Federal Emergency Management Agency (FEMA) so the rates are what they are. First, find a knowledgeable agent that really knows the National Flood Insurance Program. Second, check out our list of the top 5 ways to lower your premiums.
#1 Get an Elevation Certificate
We are asked this all the time and rightfully so. You are told you need to buy a flood insurance policy, which is separate from your homeowner’s policy. And then you are told you need a separate elevation certificate to calculate the proper premium. Or maybe you already have flood insurance and you were told getting a proper elevation certificate could lower your rising premium. So what does the elevation certificate cost?