How does the Flood Zone Code work?

Living in a flood zone will change the amount of insurance you need to carry in case of a flood. Your insurance company will likely assess a greater premium from you, whether you ask for this or not. They will be looking to protect their own interest in doing so; the chances of you making a flood claim are high if you live in a high flood zone. The flood zone codes are set by the Federal Emergency Management Agency (FEMA), and these codes are generally accepted by all insurance companies.

Property Insurance in a Risk Zone

Property insurance is the portion of insurance that covers your home and, often, some of its contents. Depending on the type of contents you elect to have covered, your furniture, appliances and carpets or building materials may be protected. The insurance company decides how much coverage you need, which is directly proportional to your premiums each month. When you live in any high-risk zone, you will need more coverage, and your premiums will be higher. FEMA has risk zones for a number of natural disasters including: windstorm, fire, flood, erosion, tsunami, earthquake, and winter storm. It is rare for a home or property to avoid all risk zones entirely; there are few places in the United States that are not at risk for some type of natural disaster. However, some homes will be in higher risk zones than others.

Determining Your Flood Zone

There are four primary categories of risk zones for flood. Your category will tell you whether the federal government mandates insurance for your area and how expensive that insurance is likely to be.

  • Moderate to low risk areas are coded B, C and X. These areas are outside of the flood zone plain, and no additional insurance is required in these zones.

  • High risk areas are coded A, AE, A1-A30, AH, AO, AR and A99. Each of these codes means something slightly different. On the whole, though, these areas have about a 25% chance of losses due to flood. They must carry additional insurance to provide for this problem.

  • High risk coastal areas, a step up from high risk areas, are coded V, VE, V1-V30. These areas also must carry, by law, flood insurance policies. 

  • Unknown areas receive the code D. They have not yet been tested for floods, but hazards do potentially exist. Insuring these areas is up to the property owner and the insurance company. The lack of data may lead to higher premiums, though, since insuring the area does carry a risk of claims.

Reducing your Premiums

Your policy will tell you how you are coded in your area. If you own multiple residences, each will likely be coded slightly differently. There is always an option to move to a low risk area. However, most people want to stay put and simply reduce premiums. You can do this by installing safety and hazard protections in your home. Ask your insurer about loss control methods that may reduce your exposure and, therefore, your premiums.


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