The Federal Emergency Management Agency requires all improved or new buildings in flood-prone areas to have proper elevation. They use elevation certificates to determine whether or not your property is susceptible to flooding.
Rhode Island Flood Insurance Addendum
Since 2013, every condo and home being sold on Rhode Island must include a flood insurance addendum to an offer to purchase. This addendum discloses flood insurance costs to potential home buyers based on an elevation certificate.
This requirement came about since buyers’ costs can differ significantly from what the seller currently pays. Additionally, some homeowners without mortgages live in high-risk areas and don’t carry flood insurance. Buyers need to understand insurance costs and flooding risk.
What is an Elevation Certificate?
An elevation certificate documents information such as the property location, flood zone, building characteristics, and the elevation of the lowest floor. The National Flood Insurance Program (NFIP) issues the form, but it must be certified by a licensed surveyor, engineer, or architect.
The certificate confirms how your property measures up against the base flood elevation (BFE) required by flood plain management ordinances. The results are used to determine the proper National Flood Insurance Program premium rate.
Importance of Elevation Certificate on Rhode Island
It is important to note that flood insurance is not included in a homeowner’s or condo insurance policy. It is separate coverage.
If you have a mortgage, you must carry flood insurance of at least your mortgage amount. Lapsed coverage is grounds for foreclosure. If you are mortgage-free, your homeowners or condo policy will not provide compensation for flooding.
Flood insurance is especially important in our state as much of Rhode Island land now lies within the VE or AE flood zones. The VE flood zone is coastal and more prone to storm waves and tidal surges. The AE flood zone applies to properties situated near floodplains, rivers, lakes, and other bodies of water.
Plus, flood maps can change. Your property could become high-risk, with premiums increasing significantly. In some cases, it can make properties uninsurable. Luckily, an elevation certificate may work in your favor.
If your home lies in a high-risk zone, but above the Base Flood Elevation, you may be able to remove it from the Special Flood Hazard Area (SFHA). This is done through a Letter of Map Change (LOMC). In return, you may be able to convert your existing flood insurance policy to a less expensive Preferred Risk Policy (PRP).
How Much Does an Elevation Certificate Cost?
The cost of an elevation certificate depends on the licensed surveyor, engineer, or architect. Generally, homeowners can expect to pay between $400 and $600. Nonetheless, this is a worthwhile outlay if it will save you thousands.
Shop around for the best deal. Rhode Island offers plenty of choices regarding companies that can provide you with an elevation certificate and a Letter of Map Change, if it applies to your property.
If you don’t have flood insurance, you should definitely obtain coverage. One study estimated the risk of flooding is about 11% higher than predicted by FEMA flood maps. With so many properties on or near the water, it simply isn’t worth risking your single most valuable asset.
Give our team a call. We’re happy to answer your questions and help you get setup with the right flood insurance policy.