Flood Insurance Glossary
Flood Insurance Glossary
Actual cash value
The value of property as figured by determining the cost to replace the damaged or destroyed property (see replacement value) and adjusting the replacement value by subtracting an amount that reflects depreciation. Simply put, replacement cost minus depreciation. Homeowners are entitled to a replacement cost value if they live in their homes at least 80 percent of the time and have flood coverage for at least 80 percent of their home's market value.
Federal Flood Insurance
Coverage made available to residents of a community on a subsidized and nonsubsidized premium rate basis after the community qualifies for protection under the National Flood Insurance Act.
FEMA
The Federal Emergency Management Agency is responsible for coordinating federal disaster response. It oversees the National Flood Insurance Program (NFIP), which was established in 1968 and is run by the Federal Insurance Administration.
FIRM
Flood Insurance Rate Map. Shows base flood elevations, insurance risk zones, and floodplain boundaries. When a community decides to participate in the NFIP, the program makes a FIRM that will help to determine flood insurance rates for buildings in the community. A Pre-FIRM building is one that existed before the community began participating in NFIP. A Post-FIRM building is one that was constructed after flood zones and related regulations were established. Pre-Firm buildings are more vulnerable to flood damage because they were not built to flood-control specifications.
Flood
Outside of fire, flooding is the most widespread natural disaster. Floods are caused by storms, melting snow, hurricanes, and water backup due to inadequate or overloaded drainage systems, dam or levee failure, etc. According to the NFIP, two adjacent properties have to be under water to call the situation a flood. In a rural area, at least 2 acres must be submerged.
Flood Insurance
A standard homeowners policy will not cover damages caused by flooding. You must have flood insurance from an insurer that writes for the National Flood Insurance Program. If your community participates in NFIP's floodplain management program, you should be eligible to buy the coverage no matter if your flood risk is low, medium or high. The only people who may have trouble finding flood coverage are residents of "coastal barrier resource system" areas and communities that do not participate in NFIP's programs. Flood insurance is also available to renters, condominium owners, and co-op owners.
Flood perils
These include the following: the overflow of inland or tidal waters; unusual and rapid accumulation of runoff or surface waters from any source; mud slides caused by flooding; the washing away, collapse or subsiding of land along the shoreline due to erosion or undermining of waves or currents of water exceeding the cyclical levels; and sewer backup caused by flooding.
National Flood Insurance Program
Coverage against flooding for personal and business property under the National Flood Insurance Act of 1968, which encourages participation of private insurers in the program through and industry flood insurance pool of private insurers that provide initial flood insurance in cooperation with the U.S. Department of Housing and Urban Development (HUD).
Preferred risk policy
Low-rate flood insurance policy (available for just over $100 a year) for people living in flood zones of minimal and moderate risk (zones B, C, and X).
Replacement value
The amount it costs to replace or rebuild a damaged property. Replacement cost coverage is available only for the building portion of a condominium policy. Owners of single-family homes may be able to buy replacement cost coverage on the building portions of their flood policies. Commercial and apartment buildings will be covered only for actual cash value. Keep in mind that a policy will pay only the replacement value up to the coverage limit. For example, if rebuilding your home will cost $250,000, but you only purchased $200,000 in coverage, your policy will pay only $200,000.
Special Flood Hazard Area
The most hazardous flood zones are V (usually first-row, beach-front properties) and A (usually, but not always, properties near water).
Standard Flood Insurance Policy
This is the name for the flood insurance policy that property owners buy from the NFIP (overseen by FEMA). It refers to the contract between FEMA as the insurer and the insureds named in the policy.
Write Your Own program/companies
Program under which policyholders get their insurance directly from private insurance companies rather than going to the NFIP. Write Your Own companies write and service about 90 percent of flood insurance policies for NFIP. You pay the same amount whether you buy it from the government or a company.
The value of property as figured by determining the cost to replace the damaged or destroyed property (see replacement value) and adjusting the replacement value by subtracting an amount that reflects depreciation. Simply put, replacement cost minus depreciation. Homeowners are entitled to a replacement cost value if they live in their homes at least 80 percent of the time and have flood coverage for at least 80 percent of their home's market value.
Federal Flood Insurance
Coverage made available to residents of a community on a subsidized and nonsubsidized premium rate basis after the community qualifies for protection under the National Flood Insurance Act.
FEMA
The Federal Emergency Management Agency is responsible for coordinating federal disaster response. It oversees the National Flood Insurance Program (NFIP), which was established in 1968 and is run by the Federal Insurance Administration.
FIRM
Flood Insurance Rate Map. Shows base flood elevations, insurance risk zones, and floodplain boundaries. When a community decides to participate in the NFIP, the program makes a FIRM that will help to determine flood insurance rates for buildings in the community. A Pre-FIRM building is one that existed before the community began participating in NFIP. A Post-FIRM building is one that was constructed after flood zones and related regulations were established. Pre-Firm buildings are more vulnerable to flood damage because they were not built to flood-control specifications.
Flood
Outside of fire, flooding is the most widespread natural disaster. Floods are caused by storms, melting snow, hurricanes, and water backup due to inadequate or overloaded drainage systems, dam or levee failure, etc. According to the NFIP, two adjacent properties have to be under water to call the situation a flood. In a rural area, at least 2 acres must be submerged.
Flood Insurance
A standard homeowners policy will not cover damages caused by flooding. You must have flood insurance from an insurer that writes for the National Flood Insurance Program. If your community participates in NFIP's floodplain management program, you should be eligible to buy the coverage no matter if your flood risk is low, medium or high. The only people who may have trouble finding flood coverage are residents of "coastal barrier resource system" areas and communities that do not participate in NFIP's programs. Flood insurance is also available to renters, condominium owners, and co-op owners.
Flood perils
These include the following: the overflow of inland or tidal waters; unusual and rapid accumulation of runoff or surface waters from any source; mud slides caused by flooding; the washing away, collapse or subsiding of land along the shoreline due to erosion or undermining of waves or currents of water exceeding the cyclical levels; and sewer backup caused by flooding.
National Flood Insurance Program
Coverage against flooding for personal and business property under the National Flood Insurance Act of 1968, which encourages participation of private insurers in the program through and industry flood insurance pool of private insurers that provide initial flood insurance in cooperation with the U.S. Department of Housing and Urban Development (HUD).
Preferred risk policy
Low-rate flood insurance policy (available for just over $100 a year) for people living in flood zones of minimal and moderate risk (zones B, C, and X).
Replacement value
The amount it costs to replace or rebuild a damaged property. Replacement cost coverage is available only for the building portion of a condominium policy. Owners of single-family homes may be able to buy replacement cost coverage on the building portions of their flood policies. Commercial and apartment buildings will be covered only for actual cash value. Keep in mind that a policy will pay only the replacement value up to the coverage limit. For example, if rebuilding your home will cost $250,000, but you only purchased $200,000 in coverage, your policy will pay only $200,000.
Special Flood Hazard Area
The most hazardous flood zones are V (usually first-row, beach-front properties) and A (usually, but not always, properties near water).
Standard Flood Insurance Policy
This is the name for the flood insurance policy that property owners buy from the NFIP (overseen by FEMA). It refers to the contract between FEMA as the insurer and the insureds named in the policy.
Write Your Own program/companies
Program under which policyholders get their insurance directly from private insurance companies rather than going to the NFIP. Write Your Own companies write and service about 90 percent of flood insurance policies for NFIP. You pay the same amount whether you buy it from the government or a company.
Special Flood Hazard Areas - High Risk
Special Flood Hazard Areas represent the area subject to inundation by 1-percent-annual chance flood. Structures located within the SFHA have a 26-percent chance of flooding during the life of a standard 30-year mortgage. Federal floodplain management regulations and mandatory flood insurance purchase requirements apply in these zones.
Zone
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Description
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A
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Areas subject to inundation by the 1-percent-annual-chance flood event. Because detailed hydraulic analyses have not been performed, no Base Flood Elevations (BFEs) or flood depths are shown.
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AE, A1-A30
|
Areas subject to inundation by the 1-percent-annual-chance flood event determined by detailed methods. BFEs are shown within these zones. (Zone AE is used on new and revised maps in place of Zones A1-A30.)
|
AH
|
Areas subject to inundation by 1-percent-annual-chance shallow flooding (usually areas of ponding) where average depths are 1-3 feet. BFEs derived from detailed hydraulic analyses are shown in this zone.
|
AO
|
Areas subject to inundation by 1-percent-annual-chance shallow flooding (usually sheet flow on sloping terrain) where average depths are 1-3 feet. Average flood depths derived from detailed hydraulic analyses are shown within this zone.
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AR
|
Areas that result from the decertification of a previously accredited flood protection system that is determined to be in the process of being restored to provide base flood protection.
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A99
|
Areas subject to inundation by the 1-percent-annual-chance flood event, but which will ultimately be protected upon completion of an under-construction Federal flood protection system. These are areas of special flood hazard where enough progress has been made on the construction of a protection system, such as dikes, dams, and levees, to consider it complete for insurance rating purposes. Zone A99 may be used only when the flood protection system has reached specified statutory progress toward completion. No BFEs or flood depths are shown.
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Coastal High Hazard Areas - High Risk
Coastal High Hazard Areas (CHHA) represent the area subject to inundation by 1-percent-annual chance flood, extending from offshore to the inland limit of a primary front al dune along an open coast and any other area subject to high velocity wave action from storms or seismic sources. Structures located within the CHHA have a 26-percent chance of flooding during the life of a standard 30-year mortgage. Federal floodplain management regulations and mandatory purchase requirements apply in these zones.
Zone
|
Description
|
V
|
Areas along coasts subject to inundation by the 1-percent-annual-chance flood event with additional hazards associated with storm-induced waves. Because detailed coastal analyses have not been performed, no BFEs or flood depths are shown.
|
VE, V1-V30
|
Areas along coasts subject to inundation by the 1-percent-annual-chance flood event with additional hazards due to storm-induced velocity wave action. BFEs derived from detailed hydraulic coastal analyses are shown within these zones. (Zone VE is used on new and revised maps in place of Zones V1-V30.)
|
Moderate and Minimal Risk Areas
Areas of moderate or minimal hazard are studied based upon the principal source of flood in the area. However, buildings in these zones could be flooded by severe, concentrated rainfall coupled with inadequate local drainage systems. Local stormwater drainage systems are not normally considered in a community's flood insurance study. The failure of a local drainage system can create areas of high flood risk within these zones. Flood insurance is available in participating communities, but is not required by regulation in these zones. Nearly 25-percent of all flood claims filed are for structures located within these zones.
Zone
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Description
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B, X (shaded)
|
Moderate risk areas within the 0.2-percent-annual-chance floodplain, areas of 1-percent-annual-chance flooding where average depths are less than 1 foot, areas of 1-percent-annual-chance flooding where the contributing drainage area is less than 1 square mile, and areas protected from the 1-percent-annual-chance flood by a levee. No BFEs or base flood depths are shown within these zones. (Zone X (shaded) is used on new and revised maps in place of Zone B.)
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C, X (unshaded)
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Minimal risk areas outside the 1-percent and .2-percent-annual-chance floodplains. No BFEs or base flood depths are shown within these zones. (Zone X (unshaded) is used on new and revised maps in place of Zone C.)
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Undetermined Risk Areas
Areas of moderate or minimal hazard are studied based upon the principal source of flood in the area. However, buildings in these zones could be flooded by severe, concentrated rainfall coupled with inadequate local drainage systems. Local stormwater drainage systems are not normally considered in a community's flood insurance study. The failure of a local drainage system can create areas of high flood risk within these zones. Flood insurance is available in participating communities, but is not required by regulation in these zones. Nearly 25-percent of all flood claims filed are for structures located within these zones.
D (unshaded)
|
Unstudied areas where flood hazards are undetermined, but flooding is possible. No mandatory flood insurance purchase requirements apply, but coverage is available in participating communities.
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