Defining the Non-Guaranteed Determination

A Non-Guaranteed Determination is any product containing a FEMA flood zone where the provider does not guarantee the result. If you are from the lending industry, you may not have heard of this because you need guaranteed results for most all lending tasks to be federally compliant and have those results printed on a Standard Flood Hazard Determination Form. But in the insurance, communication, real estate, appraisal, and property management industries, there are dozens of uses for a Non-Guaranteed Determination because, frankly, it is a lot cheaper. You may be paying $8 for a Life of Loan Determination (if you pay more, contact MassiveCert sales) or less than $4 for the same Determination without the monitoring. But a Non-Guaranteed Determination can cost pennies, or fractions of a penny.

So it’s cheap, but it’s not guaranteed for a reason, right?

Yes!  But the reason differs between providers (MassiveCert is a provider).

And that is where the problems start and what this article is all about. A Guaranteed Determination has a set of industry standards because it is a federal document and the feds have given us instructions and we guarantee the standards will be met.

There is no standard for a Non-Guaranteed Determination. Frequently, that is because a customer has a very specific use for the data, so the Non-Guaranteed Determination is customized for how they want to use it and the decisions they want to make. And a determination is not just a flood zone. A flood zone is definitely part of a Determination, and some customers only want to see a flood zone, but a Non-Guaranteed Determination can contain everything on a Guaranteed Determination and sometimes dozens of additional data elements of varying quality and accuracy. And this is the problem – how do you know what you are getting when you ask for a Non-Guaranteed Flood Zone Determination?

(Side note: FEMA doesn’t require a Guaranteed Determination for Risk Rating 2.0.)

A way to resolve this is by categorizing Non-Guaranteed Determinations so we have the framework for standardization. This is based on our experience providing millions of Non-Guaranteed Determinations. Each Grade has a purpose, and what I want to do is get all of us who use flood data on the same page when we are talking about “non-guaranteed” and what the differences are in the products you are contemplating.

Grade A

This Non-Guaranteed Determination is exactly like a Guaranteed Determination including the same quality, accuracy, data, and support, but you don’t pay for the guarantee and a different PDF form is used because the federal Standard Flood Hazard Determination Form may only be used for Guaranteed Determinations. You get the same expert staff supporting your team, the same determination databases and algorithms are used, and the same quality procedures are deployed by the provider. The same standards linked to contractual guarantees found in a Guaranteed Determination are used throughout the process. A full suite of data including previous zone, newly mapped, CBRA, community eligibility, BFE and more are included. You are likely to receive dispute support and the same level of customer and IT support you receive with a Guaranteed Determination. If a Determination case cannot be closed automatically, manual review will be performed, just as it is on a Guaranteed Determination. There should be no change in vendor service or product quality and accuracy.

Grade A Non-Guaranteed Determinations can be used for property-level decision making just as a Guaranteed Determination. This Non-Guaranteed Determination can be 90% less expensive than a Guaranteed Determination with no change in accuracy, quality, or support.

Grade B

These determinations differ from Grade A in only 1 way – manual reviews are replaced with complicated algorithms to provide the most-likely flood zone to lower your overall cost. Manual reviews are relatively expensive compared to automated reviews, so Grade B is a cost cutting measure. A most likely zone is only provided in-lieu of a manual zone – the automation process is the same as a Guaranteed Determination and a Grade A Non-Guaranteed Determination.

A most-likely zone is provided through a series of sophisticated geospatial queries to provide the zone that has the highest chance of being the true zone. This is done by analyzing the accuracy of the geocoded location, parcel data, building footprint data, proximity to other flood zones, area occupied by flood zones, and other factors. It is not a simple guess – it is a complicated and proprietary set of criteria to provide the most likely zone, and it is highly accurate although not as accurate as a manual review by a human. For most Non-Guaranteed Determination users this high level of 100% automation satisfies accuracy requirements.

Grade B determinations can be used for property-level decision making just as a Guaranteed Determination, but depending on your needs, you may want to double-check the most-likely zones if a question were ever to arise, which is unlikely. Grade B will have a lower cost compared to Grade A because Grade B is 100% automated and there will be no manual review process or cost. We also provide an option to the Grade B determination where the manual review is not performed nor is a most-likely zone provided, which is useful for some business processes.

Grade C

At Grade C, D, and E you can expect reduced levels of service, accuracy, quality, data completeness, and data currency. You may receive less than the full dataset provided with Grade A or B and the data could have longer update cycles not reflecting same-day FEMA changes which you can expect in Grade A and B. We expect a PDF report to be offered at Grade C, but it would be common to not receive one. The report may not include pin-point accuracy or useful maps showing the floodplain, parcels, satellite images, or buildings. We do expect most providers will use publicly available parcel and footprint data for location accuracy.

You are unlikely to have a determination dispute answered by the provider. It is unlikely to have manual determination services offered, and there may be wild guesses made about flood zones when the zone is not automated; whereas for Grade B, a more sophisticated most likely zone is provided. At Grade C, we expect a search for LOMA and LOMR cases using FEMA’s free NFHL data but nothing more than a simple cursory review without any of the sophisticated checks found in Grade A and B. We expect the non-modernized maps to be included, but you will want to ask the provider if they are. BFE, CBRA, and community eligibility may not be current or even included.

Grade C is not recommended for property-level mission-critical decision-making (federal compliance, insurance rating, etc.), but this data is very useful for property-level risk awareness, marketing, or mapping. There is a good blend of reasonable accuracy and lower price for tasks that are not mission-critical, and this type of determination is used frequently and effectively when matched with the appropriate purpose.

Grade D

At Grade D, you will see less data and none of the “frills” of the higher grade Non-Guaranteed Determinations. You may only receive a zone and community name. Community eligibility may not be sophisticated enough to distinguish between the mapped community and the insurance community. There will be very limited quality review and no audit QA performed internally by the provider.

No manual determination services are offered, and the support staff may have no- or very limited knowledge about FEMA, NFIP, flood maps, and the industry in general. Disputes will not be accepted. The guaranteed standards you are accustomed to (if you are from the lending or insurance industries) are unlikely to be supported as they would be for Grade A and B, and likely in Grade C. No LOMA searches will be conducted. Non-modernized FEMA data will not be provided and you are unlikely to receive a PDF report.

We expect some use of publicly available parcel or building footprint data will be utilized, but it is common to find this is not the case. Data will have a longer update cycle and could be months out-of-date and not reflect FEMA’s latest flood map zone changes.

Grade D is not recommended for property-level decisions, but this data can be useful for zip code, census area, or county/state/federal aggregation. For comparison of risk or marketing purposes, and for research at aggregated geographies, you may find Grade D useful and your cost will be less than Grades A – C.

Grade E

Typically, Grade E Determinations will provide a flood zone by intersecting the geocoded address latitude and longitude with the free FEMA NFHL data and will not rely on parcel or building footprint data for location accuracy. And the geocoding process is unlikely to be of the highest quality. As an analogy, have you ever had a mapping website drop a pin on a map for an address but the pin isn’t on top of the building you are looking for? Maybe the pin is in the street or the parking lot or the backyard? That’s acceptable for driving directions because you’ll still figure out where you are going, but if the mapping software can’t recognize the entire building, it also cannot figure out the building’s flood zone with accuracy. It is fast and inexpensive, the data is mostly free, and there aren’t many special skills required to produce the result, but there’s a trade-off in accuracy.

Grade E determinations are also likely to have infrequent data updates, no support, and no quality review. The non-modernized FEMA maps are not included, and neither is a check for LOMA cases or the other data typically needed for a complete determination. This is often a zone-only service and it’s unlikely you will receive a map or PDF report.

Use of Grade E data has a purpose. It fits into a lower budget and it can satisfy general awareness or large-scale analysis projects. Structure-level analysis and decision-making should be avoided with Grade E Non-Guaranteed Determinations because the technical process isn’t designed to support accuracy at that level of detail.

Final Thoughts

Each Grade has a purpose because flood hazard data is used in many ways to communicate risk for a wide range of customers and industries. We provide Non-Guaranteed Determinations in each of these grades to meet each customer’s specific purpose. So one grade isn’t “better” than another, but only better for your purpose. For example, if you are an insurance agent and need a Determination replacement for FEMA’s Risk Rating 2.0, you are likely going to look at Grade A and B. If you don’t need the full suite of data and your purpose is informational and not related to a property or insurance decision, then a Grade C or D at a lower cost may be a better fit. Researchers, marketers, or analysts processing millions of properties might use Grade E because it fits the budget and the accuracy is sufficient for their comparison or communication needs.

We have supplied millions of non-guaranteed flood zone determinations and consider ourselves the foremost expert on the subject. If you have any questions or comments, please feel to reach out to me or anybody at MassiveCert and we’re happy to discuss anything flood-related all day long (no sales pressure).

Stay safe,

Josh