Which factor primarily influences the determination of insurance rates for flood coverage?

The determination of insurance rates for flood coverage primarily hinges on the elevation of the lowest floor in relation to the Base Flood Elevation (BFE). BFE is the elevation that floodwaters are expected to reach during a 1% annual chance flood, also known as the 100-year flood.

When calculating flood insurance rates, insurers place significant emphasis on this relationship because properties situated below the BFE are considered at higher risk for flooding. Consequently, they will typically face higher insurance premiums. Conversely, properties that are elevated above the BFE are seen as less vulnerable to flooding, which can lead to reduced rates.

This elevation measurement directly impacts the probability of flooding and, therefore, the financial risk associated with insuring the property. Factors such as the age of the building, community flood history, and the owner's previous insurance claims might influence other aspects of the insurance process or premiums, but the primary factor in calculating flood insurance rates remains the lowest floor's elevation relative to the BFE.