Insurance Glossary

Elevation Certificate

Property

Definition

An official FEMA document that provides elevation information about a building's lowest floor and the ground elevation around the structure. Prepared by a licensed surveyor or engineer, this certificate is used to determine accurate flood insurance premium rates under the National Flood Insurance Program. Properties built at or above the Base Flood Elevation typically qualify for lower insurance rates. An Elevation Certificate may be required when purchasing flood insurance, refinancing a mortgage, or applying for a Letter of Map Amendment. The certificate is valid indefinitely unless the property or surrounding area is significantly altered.

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Related Terms

Base Flood Elevation

The computed elevation to which floodwater is anticipated to rise during a base flood (a flood with a 1% chance of occurring in any given year, also called a 100-year flood). Shown on FEMA Flood Insurance Rate Maps (FIRMs), the BFE is used to determine flood insurance premiums and building requirements. Structures built below the BFE face higher insurance costs and greater flood risk. Local building codes typically require new construction in flood zones to have the lowest floor elevated at or above the BFE. Knowing your property's BFE is crucial for flood risk assessment and insurance decisions.

The National Flood Insurance Program is a federal program created by Congress in 1968 to provide flood insurance to property owners, renters, and businesses. Managed by FEMA, the NFIP makes flood insurance available in communities that adopt and enforce floodplain management regulations to reduce future flood damage. Standard homeowners insurance does not cover flood damage, making NFIP policies essential for properties in flood-prone areas. The program offers up to $250,000 in building coverage and $100,000 in contents coverage.

Flood Insurance

Insurance coverage that protects against losses from flooding, which is specifically excluded from standard homeowners and renters insurance policies. Flood insurance covers direct physical losses caused by flooding, including overflow of inland or tidal waters, unusual accumulation of surface water, mudflow, and collapse of land along a body of water. Available primarily through the National Flood Insurance Program (NFIP) or private insurers, with a typical 30-day waiting period before coverage takes effect. Essential for properties in flood zones but recommended for all properties since 25% of flood claims come from low-risk areas.

Flood Insurance Rate Map - an official map created by FEMA that shows flood risk zones, base flood elevations, and floodplain boundaries for a community. FIRMs are used to determine flood insurance requirements and premium rates under the National Flood Insurance Program. These maps identify Special Flood Hazard Areas where flood insurance is mandatory for federally backed mortgages. Property owners can use FIRMs to understand their flood risk and make informed decisions about insurance coverage and property improvements. Maps are periodically updated as flood risk data changes.

Actual Cash Value

The repayment value for indemnification due to loss or damage of property; in most cases it is replacement cost minus depreciation.

The decrease in value of property over time due to wear, tear, age, or obsolescence.

Replacement Cost

The cost to replace damaged or destroyed property with new property of similar kind and quality, without deduction for depreciation.

Homeowners Insurance

Insurance coverage that protects your home and personal property against damage, theft, and liability claims.

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