What are Flood Zones? A Guide to Flood Zone Designations
Natural disasters that cause flooding, such as Hurricane Harvey that wiped out much of Houston and the gulf coast in 2017 and Hurricane Katrina that hit Louisiana in 2005, have a significant financial impact on communities, homeowners, and home insurance providers. Hurricane Harvey cost an estimated $125 billion in damages and affected 13 million people. >Hurricane Katrina left 300,000 homes destroyed or uninhabitable, with $250 in economic impact and damages.
Aside from the financial impact, natural disasters cause a lot of grief, heartache, and stress for individuals and families who face the need to rebuild their lives and homes. As a result, a concern for home buyers is whether or not the home they are purchasing is in a flood zone area, and if it is, what it means for them. As their realtor, you can support home buyers by sharing valuable information about flood zone designations and answering the common question, “What are flood zones?”
Flood Zone Designations
FEMA has created flood zone designations based on the percent likelihood a specific area is to be flooded in any given year. The zones are broken down into Special Flood Hazard Areas (SFHAs), moderate flood hazard areas, and minimal flood hazard areas, all of which are highlighted on an area’s Flood Insurance Rate Map (FIRM).
Special Flood Hazard Areas
SFHAs are areas at risk of being inundated by a flood event having a 1% chance of being equaled or exceeded in any year. The 1% annual chance of flood is also known as the base flood or 100-year flood zone. Zones that fall within SFHA on the FIRM include all Zones that start with an A and V, including Zone A, A1-A30, AE, AO, AH, AR, AR/AE, A99, AR/A1-A30, AR/A, AR/AO, V, V1-V30, and VE.
Moderate Flood Hazard Areas
Flood hazard areas with a moderate rating include Zone B and Zone X (shaded) on the FIRM. These zones are rated to have a 0.2% chance of an annual flood, also referred to as the 500-year flood area.
Minimal Flood Hazard Areas
Zone C and Zone X (unshaded) on the FIRM are considered to be minimal flood hazard areas. These zones fall outside of SFHAs and have an elevation higher than the areas with a 0.2% chance of an annual flood.
Flood Map Service Center
FEMA’s Map Service Center (MSC) is a handy tool for you to use and share with home buyers. The MSC offers portions of a FIRM, also referred to as FIRMettes, that are created dynamically from the National Flood Hazard Layer (NFHL)-based maps. From the MSC, you can identify flood zones by zip code or address by simply entering a value in the appropriate field.
You can pull interactive views and customizable maps that you can print from the MSC, as well. The data provided to populate the maps are updated periodically, so it’s a good idea to pull a new map of a particular area if several months have gone by since you last viewed or printed the map of that area. You can also find a tutorial on how to read a flood insurance rate map from FEMA’s MSC.
Mandatory Flood Insurance
Mandatory flood insurance is required for homes that fall within a high-risk flood area and are funded by a federally insured or regulated lender. Some private lenders might also require mandatory flood insurance for homes that fall within the high-risk flood areas. The two options for home buyers is to purchase flood insurance through the National Flood Insurance Program (NFIP) or from a private lender. Flood insurance typically costs between $400 and $800 annually.
For homes that fall in moderate-to-low flood zone designations, it’s still wise for homebuyers to consider flood insurance. Flood damage is costly. A single inch of water in a home can result in more than $25,000 worth of damages. Homeowners in moderate-to-low flood zone designations are five times more likely to experience a loss due to flooding vs. a fire within a 30-year period, and most homeowners’ insurance policies do not cover damage caused by flooding.
Using Flood Zone Maps in Real Estate
The increase in natural disasters, coupled with the devastation many have witnessed due to flooding, home buyers are more concerned now than ever before about purchasing homes in high-risk flood zone areas and finding ways to protect themselves when they do.
As a neighborhood real estate expert, being able to access, understand, and share information about what are flood zones and flood zone designations is essential. Understanding all resources available from the FEMA MSC and how to read flood zone maps are some of the necessary real estate tools to support you in being readily available and able to answer home buyers’ flood zone questions when they arise.
With the help of Home Junction, you can provide insight on flood zones by zip code, neighborhood, or even subdivision level. With boundary data from 2,300 counties where flooding may arise, you will be equipped with everything you need to put your buyers’ and sellers’ minds at rest. If your local area is prone to floods, consider incorporating the Slipstream real estate data API into your practice, and contact us today for more information.