What impacts flood insurance policy costs?

A number of factors are considered when determining your annual flood insurance premium. These factors include:

  • Flood risk (e.g., your flood zone)
  • The type of coverage being purchased (e.g. building and contents coverage)
  • The deductible and amount of building and contents coverage
  • The location of your structure
  • The design and age of your structure
  • The location of your structure’s contents (e.g. Are your utilities elevated?)

With its new rating methodology, Risk Rating 2.0: Equity in Action, FEMA also now has the capability and tools to address rating disparities by incorporating more flood risk variables. These include flood frequency, multiple flood types — river overflow, storm surge, coastal erosion, and heavy rainfall — and distance to a water source, as well as property characteristics such as elevation and the cost to rebuild. 

Your property’s elevation

For properties in high-risk flood areas built after the first Federal Emergency Management Agency (FEMA) flood maps, the elevation of the building in relation to the base flood elevation is also a factor.

While Elevation Certificates (ECs) will no longer be required to purchase coverage under Risk Rating 2.0: Equity in Action, a property owner may choose to provide an EC and submit it to their agent to determine if it will lower their cost of insurance. ECs will also continue to be used for floodplain management building requirements, which can affect eligibility for Community Rating System discounts.

Learn more about ECs and how you can pay less.