SECTION FIVE - RATING

 

This SECTION covers Types of Buildings, When to Use an Elevation Certificate, Elevated Buildings, Buildings with Basements, and Grandfathering

 

TYPES OF BUILDINGS

There are three basic types of buildings for rating purposes:

• Buildings with no basement, built on a slab
• Buildings with a basement, buildings sub-grade on all four sides
• Elevated buildings, foundation walls, shear walls, piers, posts, pilings or columns

Please review all eight Building Diagrams in the Lowest Floor Guide section of the Flood Insurance Manual within Flood zones A and V. (See below) Use this section to identify the lowest floor elevation against the base flood elevation in order to obtain the elevation difference needed for rating.  Also, review the building definitions and requirements for elevated buildings.

 

 

 

 

 

 

 

 

ELEVATED BUILDINGS

An elevated building is one that has no basement and that has its lowest elevated floor raised above ground level by foundation walls, shear walls, posts, piers, pilings or columns.

 

BUILDINGS WITH BASEMENTS

For flood insurance purposes, a basement is defined as an area of a building, including a sunken room or sunken portion of a room, having its floor subgrade on all sides.

 

WHEN TO USE AN ELEVATION CERTIFICATE

An Elevation Certificate is required when flood insurance is applied for on a building that is located in a Special Flood Hazard Area (SFHA) and construction or substantial improvement started after December 31, 1974, or on or after the date of the initial FIRM of the community, whichever is later.

 

These buildings are described as being Post-FIRM.

 

 

In most cases, the lowest floor level of a Pre-FIRM building is below the BFE and it would not benefit policyholders to pay the cost for an Elevation Certificate because the actuarial rate would be higher than the Pre-FIRM rate.

However, the decisions to purchase the Elevation Certificate and to request Post-FIRM rating of a Pre-FIRM building are an option of the insured.

Sometimes Pre-FIRM buildings can be rated as Post-FIRM.  These buildings are constructed with flood mitigation in mind.  Pre-FIRM construction located in an SFHA can be rated using the Post-FIRM elevation rates, which are more favorable if the lowest floor elevation of the building is at or above the BFE for the community.

The new EC Form (see above) and instructions (and as shown on pages Cert 11-26 in the Flood Insurance Manual, Special Certifications), will be phased in on a voluntary basis until December 31, 2006.  Elevations certified on or after January 1, 2007, must be on the new form and include at least two photos, as described in the new EC form.  Please review the Special Certifications section of the Flood Insurance Manual for additional information.

GRANDFATHERING

When Flood Insurance Rate Maps (FIRMs) are updated, areas previously identified at low-to-moderate risk of flooding may be identified on the new FIRM as high flood risk areas (SFHAs).  However, two classes of property owners qualify for Grandfathering based on pre-existing conditions.  Grandfathering recognizes policyholders who built in compliance with a previous FIRM and/or maintained flood insurance coverage under the NFIP before the new FIRM is implemented.

Property owners whose buildings are now listed in high flood areas on the new maps are faced with much higher flood insurance premiums.  Grandfathering allows such property owners to qualify for standard flood insurance premium rates based on their existing conditions.

• Grandfathered policyholders have the option of:
• Using current rating criteria for that property based on pre-existing conditions, or

Having the premium rate determined by using the BFE and/or flood zone on the FIRM (old map) in effect when the building was originally constructed (for those built in compliance) or when coverage was first obtained (for those with continuous coverage).

 

RESOURCES FOR RATING A FLOOD INSURANCE POLICY

Resources include:

• Flood Insurance Manual – includes the rating steps and eligibility criteria;
• Agents, particularly if new to the NFIP, should seek assistance from the Participating NFIP Write Your Own Company;
• Flood Insurance Premium Rating Software providers, vendors are listed online at

http://www.fem.gov/business.nfip/software.htm

QUIZ

 

1.  For flood insurance purposes, a basement is defined as an area of a building, including a sunken room or sunken portion of a room, having its floor sub-grade on all sides.

     A.  True.

     B.  False

 

2.  The term FIRM stands for:

     A.  Flood Insurance Regulation Map

     B.  Flood Insurance Rate Map.

     C.  Blanket Coverage.

     D.  Flood Hazard Boundary Map

 

3.  A (n) ______________ has no basement, it's lowest elevated floor is raised above ground level by foundation walls.

     A.  Condominium.

     B.  Elevated building.

     C.  Enclosure.

 

ANSWERS TO QUIZ

1A     2B     3B