Understanding the Different Types of Flood Zones
What is the difference between flood zone A and AE?
If you are working with your client to understand their property’s flood risk, you may feel like you’ve been served a big bowl of alphabet soup. There are letters galore to describe the different flood zones. In order to determine which zone applies to your client’s home, you can enter their address and view their flood insurance rate map – also known as a FIRM – through the FEMA Flood Map Service Center. But if you’ve misplaced your secret decoder ring to decipher their flood zone designation, read on.
How are flood zones determined?
There’s a lot that goes into determining whether an area is likely to flood. One such input is a hydraulic analysis
. Engineers will run tests to determine how water will runoff a piece of land, and how quickly a nearby river or stream will carry that water away. Combine the results of that study with other information including historical flood records, weather patterns, local preventative measures such as dams and levees, and you can begin to estimate how likely an area is to flood.
What is a 100-year-flood?
You’ll see this phrase used when describing flood zones, and it can be a bit confusing. The idea is that in any given year there is a 1% chance of flood waters reaching a specific level, known as the base flood elevation, or BFE. Another way to look at it is that flood waters are likely to rise to a certain elevation once every 100 years. That can be misleading, because you could have two 100-year-floods in back-to-back years. Remember that these are probabilities, not certainties. FEMA refines its estimates and flood zone designations periodically when new data becomes available, meaning that your client’s flood zone may change over time.
Special Flood Hazard Areas (SFHAs)
Here’s a quick rundown of the different types of flood zones you’ll find on a FIRM. Get ready to use some of the terminology described above.
High Risk Zones
These areas have a 1% annual chance of flooding and a 26% of flooding over the life of a 30-year mortgage. Flood insurance is mandatory in these zones.
- Zone A: Approximate methods have determined this to be a high-risk zone, but no detailed analysis has determined the BFE or flood depth.
- Zone AE: Detailed studies have been performed to determine BFEs. This designation replaced the previously numbered Zones A1 – A30.
- Zone AH: In the event of a flood, ponding is estimated to occur with a water depth between 1-3 feet.
- Zone AO: Typically designated near rivers or where there is sloping terrain, flood water here is estimated to flow in a broad sheet at higher velocity, with a depth of between 1-3 feet.
- Zone AR: An area where a dam or levee provided flood protection but is currently under restoration.
High Risk Coastal Zones
- Zone A99: An area where a flood protection system, like a dam or levee, is significantly close to completion.
These areas also have a 1% chance of flooding and a 26% chance of flooding over the life of a 30-year mortgage, and there is the additional risk of storm waves. Flood insurance is mandatory.
- Zone V: Like Zone A above, approximate methods were used to determine the flood risk, but no detailed study to determine a BFE
- Zone VE: Analyses have determined a BFE. This designation replaced the previously numbered Zones V1 – V30.
Does your client need flood insurance in Moderate- to Low-risk Zones?
Zone B (or Shaded Zone X) is an area at moderate risk of flood, and Zone C (or Unshaded Zone X) is an area with minimal flood risk. Flood insurance is not required in these areas, but you may want to talk to your client about optional coverage. According to FEMA, 30% of flood insurance claims come from outside high-risk flood zones.
Selling Flood Insurance Outside High-Risk Flood Zones
Don’t miss out on the opportunity to sell flood insurance even in areas with moderate or low risk. If you find it challenging to sell non-mandatory flood insurance, Aon Edge has put together an eBook with a variety of resources and strategies to help you make the case to your clients. Take a read and reach out to one of our sales reps with questions. We’ve helped other agents down this road and can help open up your business to a broader array of clients.
This article is provided for general informational purposes only and is not intended to provide individualized advice. The article is not a replacement for any NFIP publications. All descriptions, summaries or highlights of coverage are for general informational purposes only and do not amend, alter or modify the actual terms or conditions of any insurance policy. Coverage is governed only by the terms and conditions of the relevant policy.