Understanding Flood Zones

When you borrow money to buy a home and sign all of those documents describing the terms of the mortgage, one of those clauses may say that you are required to carry and maintain flood insurance on the property. In this case, your lender has determined that your house is in a Special Flood Hazard Area (SFHA) that has an approximate 25 percent chance of flooding in any given year of a 30-year mortgage. The Federal Emergency Management Agency (FEMA) defines a SFHA as having a one percent chance of flooding in any given year. This categorization is also known as the 100-year flood rate. 

Flood Insurance Rate Maps (FIRM) cover almost every community across the country and show whether or not your home is in an area that may be at risk of flooding. Areas and communities are divided up into different flood zones. Each designated zone may represent a high, moderate or low risk of flooding. If you live in a moderate or low-risk area, your lender may not require you to carry flood insurance. 

Lenders that do their due diligence can look up any specific property address to determine if the property being considered for a mortgage is in a SFHA. Insurers can also access flood maps and other data to determine the specific flood zone of a property. As an individual, you can see for yourself if the property you own, or are considering buying, is in a flood zone by going online and visiting FEMA’s Flood Map Service.

Flood Insurance Premiums are Based on Risk

It is possible for almost any area of the country, state or local community to flood. How likely that risk may be depends on a number of variables. If you live across the street from the ocean, you have a high risk of flooding due to tidal surge. If you live in a low-lying area below sea level, you have an elevated risk of flooding (water runs downhill). On the other hand, if you are miles away from the nearest river or body of water, and live up in the mountains, your risk of being inundated by flood waters is low. 

Specific Zones

FEMA uses the alphabet to categorize flood zones by risk. If you live in an “A” or “V” zone, you are in a Special Flood Hazard Area and will most likely be required to carry flood insurance (unless you own your home free and clear). “V” zones are considered the most hazardous and are usually associated with beachfront properties. “A” zones are often located near rivers, lakes or other bodies of water. Other zones where there is a minimal risk of flooding and normally do not require flood insurance include “B”, “C” and “X”. “D” zone flood hazards have not yet been officially determined and you may or may not be required to carry flood insurance.

Want to learn more about how flood insurance can protect your investment in property? Your independent insurance agent can help assess your situation and recommend personalized coverage options.

Protect your family from nature’s worst. Contact us today for more information on flood insurance.