Flood Zones & How They Affect Insurance
The Federal Emergency Management Agency (FEMA) categorizes communities that have a higher risk of flooding into one of several flood zones.
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If your home resides in a high-risk flood zone, you're required to purchase a flood insurance policy to qualify for a mortgage.
Some lenders also require flood insurance for homes located in areas with moderate risk. Purchasing a flood insurance policy will protect you from financial loss, too.
In the past, FEMA and the National Flood Insurance Program (NFIP) primarily used flood zones to set flood insurance rates. Recently, it developed a new method, which uses a number of factors specific to your home to calculate a more individualized rate.
Which flood zones require insurance?
If your home is located in a zone beginning with the letters A or V, you're required to purchase flood insurance.
Flood zone | Required | Annual flood risk | Flood source |
|---|---|---|---|
| B and X (shaded) | No | 0.2% - 1% | Undefined lesser hazards |
| C and X (unshaded) | No | < 0.2% | Undefined lesser hazards |
| D | No | Uncertain | Undetermined potential hazard |
| A, AE, AR, A1-30, A99 | Yes | 1% | Undefined |
| AH | Yes | 1% | Ponds and other sources of shallow flooding |
| AO | Yes | 1% | Rivers or streams |
| V, VE, V1-V30 | Yes | 1% | Coastal areas, associated with storm waves and other hazards |
Flood zones reflect the likelihood of a flood occurring in a particular area. Even in the most flood-prone communities, the probability of flooding in any given year is low — usually between 0.2% and 1.0%.
Keep in mind that these percentages reflect the odds of flooding for your area as a whole, not your individual home. Your personal exposure to flood risk depends on the severity of the flood, your home's location in the zone and the level of flood protection you've added to your home.
A 1% annual risk of flooding translates into a 26% chance of experiencing a flood at least once over the lifetime of a 30-year mortgage.
The National Flood Insurance Program (NFIP), a division of FEMA, will sell a policy to any homeowner living in a flood zone, regardless of risk.
You can also buy a flood policy from a private insurer, but private insurers may not offer coverage to homeowners in the highest-risk areas.
How do I know if I need flood insurance?
You can use FEMA's Flood Insurance Rate Map (FIRM) to look up your property's flood zone. Be patient with this map and website, as it can take a while to load. Once you can see your address on the map, you can find your flood zone displayed in close proximity.
If a property covers two or more flood zones, your insurer will base your flood insurance rate on the most hazardous zone.
How are flood insurance rates calculated?
Although your flood zone is important when determining whether you need flood insurance, it's no longer used to calculate your flood insurance rate.
FEMA and the NFIP recently implemented a new method of calculating flood insurance premiums called Risk Rating 2.0. The new method uses property-specific data to calculate your flood insurance rate, instead of determining risk based on your property's location on a flood map. This means your rate will be more reflective of your individual property's flood risk.
Risk Rating 2.0 uses 24 factors to determine your flood insurance rate, including:
- The state where your home is located
- Distance to the nearest body of water (i.e., river, ocean or lake)
- The elevation of both your property and your home's structure
- Your home's foundation type
- The height of your first floor
In addition, these factors are rated based on your property's likelihood to experience events like inland flooding, storm surge, tsunami and coastal erosion.
These metrics are combined to determine a base rate to protect your home's structure and the cost to replace its contents. The base rate is for $1,000 of coverage, which can then be multiplied by the amount of protection you need.
California | South Carolina | |
|---|---|---|
| Yards to river | 40 | 120 |
| Elevation above river | 1 | 4.6 |
| Miles to ocean | 1.5 | 4 |
| First floor elevation | 0.5 | 5.5 |
| Building coverage rate | $4.42 | $2.67 |
| Contents coverage rate | $6.87 | $3.80 |
| Annual rate | $2,365 | $1,507 |
Building and contents rates are per $1,000 of coverage. Annual rate is based on $250,000 of building coverage and $100,000 of contents coverage
For example, a home in South Carolina is located 120 yards from a river and four miles from the ocean. The property is 4.6 feet above river level, and the first floor is 5.5 feet off the ground. Based on these factors, and more, a policy from the NFIP would cost $2.67 per $1,000 of coverage for the building and $3.80 per $1,000 of coverage for the contents of your home.
In comparison, a home in California located 40 yards from the river and 1.5 miles from the ocean. The property is one foot above the river level, and the first floor is elevated half a foot above the ground. A policy for this home would cost $4.42 per $1,000 of coverage for the building and $6.87 per $1,000 of coverage for the contents of the home.
What does your home's flood factor mean?
Your flood factor is determined based on the likelihood of your property flooding over a 30-year period and the likelihood that one inch of water will reach your house. Homes are rated from one to 10, and a higher score means both that you’re more likely to experience a flood and that the flood will be deeper than average.
While it's a smart idea to know your home's flood factor and understand its meaning, it isn't used by the NFIP to calculate your flood insurance rates.
Frequently asked questions
What does flood factor 9/10 mean?
A flood factor 9/10 means that your home has a 99% chance of experiencing one inch or more of flooding over a 30-year period. While this is important to know, flood factor is not used by the NFIP to determine flood insurance rates.
Does flood zone AE require flood insurance?
Yes, if you're located in a flood zone that begins with A or V, you're required to purchase flood insurance.
Do I need flood insurance in zone X?
Homeowners located in flood zone X aren't required by law to purchase flood insurance. However, your mortgage lender may still require you to purchase a policy. In addition, you may want to consider flood insurance if you're located near a body of water or your area has extreme weather events, like major rain storms or hurricanes.
Are all flood insurance rates the same?
No, all flood insurance rates are not the same. Your flood insurance rate is based on a number of individual factors, like your property's distance to a body of water and the elevation of your first floor. This ensures that the rate you're paying reflects your home's risk of flooding.
Methodology
Flood insurance premium examples were provided by FEMA.