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Understanding the Unique Facets of Flood Insurance: Flood Zones

Author: Chris Boggs

I don't need flood insurance, I'm not in a 'flood zone.'" Or, “I don't need flood insurance because my mortgage company said I don't need it." These statements are made more often than any insurance agent would like to admit, but the frightening part is that some agents might agree with the statements without questioning or understanding the potential fallacy within both.

Every structure located in one of the more than 21,000 NFIP- participating communities is in a “flood zone." These “flood zones" are located in all 50 states, DC and five territories or possessions; however, the insured's house or building may simply not be in one of the “high hazard" zones.

What the client is really trying to say is, “I don't need flood insurance because I'm not in a Special Flood Hazard Area (SFHA)." The reality is that the client just doesn't know the correct terminology; but agents must know the reality and be able to effectively and tactfully correct the client when discussing the need for flood coverage. But more importantly, the insured must realize that being located outside a SFHA does not guarantee freedom from the possibility of flood loss.

Other often used misnomers in news reports and newspapers are statements such as “100-year flood plain," or the “100-year flood event." Although the creation and use of both terms makes some relative sense based on the statistical calculations used to establish these hazardous flood areas— both give the wrong impression of the true flood risk. Furthermore, “flood zone," “100-year flood plain," and “100-year flood event," although favored by the media and perpetuated by property owners (and some agents), are over-simplified attempts to describe Special Flood Hazard Areas (SFHAs) and are incorrectly applied to the true flood exposure.

Defining Special Flood Hazard Areas (SFHAs)

A Special Flood Hazard Area (SFHA) is defined as an area having a one percent (1%) chance of being inundated by flood waters in any given year (thus the creation and misuse of the term “100-year flood plain"). Flood waters have an equal chance of submerging these areas every year for 5 straight years, or not for 200 years; there is simply a one percent statistical possibility every year. Homes located in SFHAs have a 26 percent chance of suffering flood damage during a normal 30-year loan according to FEMA.

There are two broad classifications of SFHAs: 1) “A" zones and 2) “V" zones. Further information about these zones can often be found within the Flood Insurance Rate Maps (FIRMs). Detailed information about each of the Special Flood Hazard Area subclassifications can be found on FEMA's website.

What Makes a “V" a “V"?

Differentiating between “A" zones and “V" zones is relatively simple: “V" zones are generally located near areas subject to hazardous tidal flows (waves) such as the ocean. “A" zones are those areas subject to inundation by overflow of rivers, low-lying areas subject to ponding, etc. “V" can be imagined to signify “velocity"; the water is flowing with the increased hazard and damage of wave action. “A" can represent “altitude;" the water goes up and goes back down, but it lacks most of the damaging wave action found in a “V" zone.

When reviewing a coastal Flood Insurance Rate Map (FIRM), it is common to find “V" zones morph into “A" zones. Both areas are still Special Flood Hazard Areas, but there's a difference in the supposed hazard and potential damage leading to different rating criteria. A common question is, “How is that point decided? Where does a 'V' become an 'A'?"

To establish the transition point, engineers must calculate two heights: 1) the “1%" or “100-year" still-water height and 2) wave heights above the still-water height. Wave height decreases the further up the shore the water moves; when the anticipated height of the tidal wave falls to less than 3 feet above the “100-year" still-water height, the “V" zone ends and the “A" zone begins. “Base Flood Elevation" (BFE) and “100-year" still-water height are not synonymous. The BFE includes some wave action in its calculation.

Agents who write flood coverage do not necessarily need this information for rating purposes, but it is essential to understand the differences and the reasons for them when discussing coverage and rating with a client. Removing some of the mystery in flood insurance can put the client more at ease.

“A" and “V" Zone Differences

“A" zones and “V" zones differ in two primary areas: 1) reference point, and 2) acceptable means of elevating the structure. 

Reference Points

Reference points used for rating policies in Special Flood Hazard Areas differ depending on a structure's zonal location. “A" zones use the bottom of the first elevated floor as the reference point for calculating the height above (or below) Base Flood Elevation. However, “V" zones use the bottom of the lowest horizontal support for the measuring point. “V" zone reference points could be as much as 18 inches to 2 feet lower than “A" zone reference points. But why is the bottom of the lowest horizontal support used in a “V" zone? Because of the damage potential presented by wave action.

Elevating Methods

“A" and “V" zones also differ regarding the acceptable means for elevating the structure. Structures located in “A" zones may be elevated above Base Flood Elevation (BFE) either by pilings, columns, shear walls, or a solid foundation perimeter wall with appropriate openings.

Proper openings in a solid foundation perimeter wall for structures located in an “A" zone allow for the free passage of water into and out of the building without requiring human intervention to open or close. Other NFIP requirements for these openings include: 1) a minimum of two openings on different sides of each enclosed area, 2) at least one square inch of opening for each square foot of enclosed space, 3) the bottom of the openings can be no more than one foot above the grade immediately below the vent, and 4) windows, doors, and garage doors are not considered proper openings (they require human intervention). If the “A" zone structure lacks sufficient openings as defined, the reference point becomes the ground beneath the structure.

Pilings, columns, shear walls, or “breakaway" walls are the only NFIP allowable method for elevating a structure in “V" zones.

  • Shear Wall – A shear wall is a structural support running parallel (as nearly as possible) to the flow of the water. These walls are not structurally joined at the ends allowing for water to flow through unimpeded.
  • Breakaway Walls – Breakaway walls are non-structural walls perpendicular to the flow of water (taking the direct hit) designed to fail under certain wave force conditions. The failure of these walls should cause no damage to the structural supports, the foundation, or any part of the building above the walls.

Supposed “Non-hazardous" Flood Zones

Non-special flood hazard areas (non-SFHAs), historically delineated using “B," “C," or “X," are considered areas of moderate or minimal hazard generally only expected to flood in times of severe storms or when drainage problems exist. However, FEMA states that 25 percent to 30 percent of all flood insurance claims are paid in these “less hazardous" areas; so, neither insureds nor agents should ignore flood insurance just because the property is not in areas considered “hazardous."

Zones historically labeled “B" or “C" are being replaced with variations of “X." As Flood Insurance Rate Maps (FIRMs) are updated, non-SFHAs will be assigned a “Shaded X" (previously a “B") or simply an “X" (previously a “C"). Base Flood Elevations are not indicated in either “X" zone.

“Shaded X" zones correspond to areas with a higher probability of flooding (moderate hazard) than areas tagged by an unshaded “X" (minimal hazard). A “Shaded X" indicates the area has a 0.2 percent annual chance of flooding (the “500-year" flood line) or a one percent chance of experiencing flooding of less than one foot in any given year (not high enough to be classified as a Special Flood Hazard Area).

Agents with clients depending on Difference in Condition (DIC) policies to provide flood coverage must pay close attention to the flood coverage exclusions found within the DIC policy. Some DIC forms exclude flood outright or increase the flood deductible to match the maximum available coverage offered by NFIP policies for structures located in Special Flood Hazard Areas (“A" and “V" zones) and Shaded “X" zones. This “Shaded X" wording is often thrown into the DIC without the agent's or insured's knowledge. If such limitation cannot be negotiated out, then the insured must be informed, and any structures located in “Shaded X" zones must be covered by an NFIP policy.

Areas where the flood hazard is undetermined are shown on the FIRM as a zone “D." This zone may also be used when one community incorporates portions of another community where no map has been previously prepared.

Zone Lines: More than One Zone

Flood zones do not follow property boundary lines; they are a function of the water source, protective measures, erosion, drainage, and other hydrological factors. Zones may change in the middle of an individual's yard or in the middle of the living room. Questions often arise as to when the more hazardous zone must be used.

When any part of the structure or its permanent, real-property attachments is dissected by the zone line, even if it is a part of the structure not covered by the flood policy, the more hazardous zone is applied. Even if the deck attached at the rear of the house is partially in an “A" zone and partially in an “X" zone, the entire house is rated in the “A" zone, even though the deck is not covered by the flood policy.

If the line is in the back yard, rating is based on the zone in which the house and its real property attachments is located. It is not the zone of the land that matters; it is the zones in which the structure itself is located.

Flood Series

This is one of a series of flood articles discussing and detailing the unique facets of the NFIP flood program. To continue researching the unique facets of the NFIP, visit any or all the links provided:

  1. Understanding the Unique Facets of Flood Insurance: Flood Zones
  2. Understanding the Unique Facets of Flood Insurance: Flood Policy Forms
  3. Understanding the Unique Facets of Flood Insurance: Participating Communities in the Regular Program
  4. Understanding the Unique Facets of Flood Insurance: Policy Terms and Conditions Unique to Flood Coverage
  5. Understanding the Unique Facets of Flood Insurance: Unique Flood Policy Definitions
  6. Understanding the Unique Facets of Flood Insurance: CBRA Zones and Otherwise Protected Areas (OPAs)
  7. Understanding the Unique Facets of Flood Insurance: Key Underwriting Questions

Read the entire series here.


First Published: August 23, 2021


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