What Is an AE Flood Zone, and How Is It Rated by Insurance Companies?

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The National Flood Insurance Program gives the designation AE to areas that have a 1 percent probability of flooding in an year, explains Insure.com. Additionally, such localities are considered to have a 26 percent chance of flooding in the course of a 30-year mortgage.

The National Flood Insurance Program assigns the letters B, C and X to areas with a low-to-moderate risk of flooding, according to Insure.com. Such regions are considered to have a less than 1 percent chance of flooding in a given year. This designation is also given to localities that are protected by levees and have less than 1 percent chance of flooding in an year. While available, flood insurance is typically not mandatory for such localities.

The National Flood Insurance Program gives the letter A to areas with a high risk of flooding, explains Insure.com. Depending on the locality, this designation may carry a suffix. For instance, AO refers to areas that are at risk from stream and river floods or to zones that have a 1 percent probability of shallow flooding up to depths of up to 3 feet. Flood insurance is mandatory in such areas. However, premiums may be capped in areas branded AR; this designation is given to zones where flood control systems such as dams are under construction or renovation.

The National Flood Insurance Program assigns V to coastal areas that are prone to flooding and gives a D designation to areas where the flood risk remains undetermined, notes Insure.com.