Floods are a real threat to homeowners.
Every parcel of land in the United States lies in a flood zone. The Federal Emergency Management Agency, or FEMA, classifies each parcel with a system that identifies its risk. Maps are issued which indicate the designations. Because regular homeowner's insurance does not cover flood damage, your flood zone determines whether or not to buy flood insurance, how costly it will be and whether it is required for a loan.
Moderate to Low Risk
The maps that designate flood zones are known as Flood Insurance Rate Maps, or FIRM. All land designated as moderate to low risk does not require the purchase of insurance for a loan. Flood insurance is available for all property owners and renters through the National Flood Insurance Program at Flood Smart.gov. Land denoted as low risk is deemed to be outside the 500-year flood, while moderate risk is considered to be outside the 100-year flood. FEMA defines a 100-year flood as land that has a 1 percent chance of flooding in a given year, while a 500-year flood has a 2 percent chance of flooding in a given year.
High Risk Areas
Homes in areas designated as high risk for floods must carry flood insurance for loans from federally insured lenders or federally guaranteed loans. The National Flood Insurance Program defines a flood as a temporary condition where two or more acres of normally dry land or two or more properties are inundated with water or mudflow. High risk areas have at least a 1 percent chance of flooding in any given year, or a 26 percent chance of flooding over the life of a 30-year mortgage.
High Risk Coastal Areas
FEMA maps list coastal areas in a different classification even though the areas carry the same requirements as other high risk areas. In some areas there are no base flood elevations. These parcels of land carry the extra risk of flooding associated with storm waves beyond the normal 1 percent risk.
Undetermined Flood Risk
Some parcels of land are in undetermined risk zones, due to uncertainty or the lack of sufficient evidence to make a decision. In any event the availability of flood insurance would be on a case-by-case basis.
Rates
The National Flood Insurance Program sets rates found at its website, Flood Smart.gov. An example would be a residence without a basement in a moderate to low risk area insuring the building for $100,000 and contents for $40,000. The annual premium in 2011 is $274. This is the preferred rate for qualified structures. A comparable policy in a high risk flood zone, for a $100,000 building and $30,000 contents (the closest available), would have an annual premium of $1,100.
Tags: chance flooding, percent chance, percent chance flooding, chance flooding given, Flood Insurance, Flood Insurance Program, flood zone
