How are my premiums affected by living in a flood zone?

By Jacques Wong | Last updated: March 17, 2017

To put it simply, living in a flood zone affects your flood insurance premiums by influencing your level of exposure to a flood-related loss. Most insurers in the United States use your zip code (either in part or in full, depending on how detailed they want to be) and match them to a FEMA Flood Zone Designation.

FEMA Flood Zone Designations are currently organized as follows:

  1. B and X (shaded) stand for moderate flood hazard
  2. C and X (unshaded) stand for minimal flood hazard
  3. Any designation that starts with an A is considered a high-risk area. In these areas, flood insurance is usually required.
  4. Any designation that starts with a V is considered a high-risk coastal area. Again, flood insurance may be mandatory here.
  5. D stands for undetermined risk areas, meaning no flood hazard analysis has been performed here.

More detailed information on the different flood zone designations and their meanings are available on the FEMA web site.

If you are in a higher risk area (a flood zone), it stands to reason that your flood insurance premiums will be higher to compensate the insurer for that increased risk (for a related discussion, see 5 Ways Climate Change Can Affect Your Home Insurance Policy).

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Written by Jacques Wong

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Jacques grew up around the insurance industry and began actively participating in 2013. Since then, he has gotten a Level 2 license, won Insurance Council of BC awards in 2015 and 2020 for academic excellence in the insurance licensing courses. He educates insurance professionals through PNC Learning and as a Thought Leader at ReFrame Insurance.

In his day job as an insurance broker, he helps businesses with creative risk management solutions and strategic advice when it comes to insurance.

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