Flooding is one of the most common and destructive natural disasters — and also one of the most underinsured loss events. The possibility of experiencing a flood is greater than many people realize.
One misperception about flood risk arises from confusion over the statistical probability of certain severe events, such as the “100-year flood.” With such a name, you might assume it refers to a flood so devastating it would only happen once every 100 years. In actuality, this term refers to the 1% chance of a large flood event that reaches or exceeds the base flood level in any given year.
High-risk flood hazard areas are identified on the Flood Insurance Rate Maps (FIRMs) as Special Flood Hazard Areas (SFHA). It is these land areas that would be inundated during a 100-year flood, with elevation at or below the base flood level.
Also shown on the FIRMs, are the moderate flood hazard areas, which are between the limits of the 1% and the 0.2%-annual-chance (or 500-year) flood. Areas outside the SFHA and higher than the elevation of the 0.2%-annual-chance flood, are considered zones with minimal flood hazard.
While the FIRMs can provide homeowners with some understanding of potential flood risks, flooding frequently occurs outside of high and moderate-risk areas, and even smaller floods can cause significant damage.
According to the U.S. Army Corps of Engineers, a homeowner in a SFHA has a 26% chance of experiencing a 100-year flood during any 30-year period, which happens to be the duration of many mortgages. Additionally, the yearly likelihood of an individual being impacted by a 25-year flood are greater than the chances of being involved in a car accident, becoming a victim of burglary, or being affected by a residential fire.
