Written by Save Flood Insurance Agency
What a Special Flood Hazard Area Means
A Special Flood Hazard Area is a location identified by FEMA as having a higher risk of flooding. These areas are commonly referred to as “A zones” and indicate a one-percent chance of flooding in any given year.
While the term “100-year floodplain” is often used, it does not mean flooding happens only once every 100 years. It means there is a measurable annual risk that exists every year.
Why Flood Insurance Is Required for Mortgages
When a property is financed with a federally backed mortgage, lenders are required to ensure flood insurance is in place if the home is in a designated high-risk flood area. This requirement exists to protect the property serving as collateral for the loan.
If a home were purchased with cash, flood insurance would not be mandatory, though it may still be a wise form of protection since standard homeowners insurance does not cover flood damage.
Flood Risk Over the Life of a Mortgage
Flood risk accumulates over time. A property located in a high-risk flood area has a meaningful chance of flooding during the typical length of a mortgage, even if flooding has never occurred before.
This long-term risk is why lenders treat flood insurance as a standard requirement rather than an optional safeguard.
Your Flood Insurance Options
While lenders require flood insurance in certain situations, borrowers are not always limited to a single provider. In addition to NFIP coverage, private flood insurance options may be available depending on the property and lender acceptance.
Coverage eligibility and pricing can vary, which is why comparing options can be worthwhile.
Helpful Resources
For additional background on flood zones and lender flood insurance requirements, these official resources provide clear explanations:
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FEMA’s FloodSmart overview of flood zones and flood insurance requirements
