A special flood hazard area is a specifically defined area that has a 1 percent chance of being inundated by flood waters in any given year (thus the creation of the term "100-year flood plain"). Flood waters have an equal chance of submerging these areas every year for five straight years, or not for 200 years; there is simply a 1 percent statistical possibility EVERY year. Homes located in special flood hazard areas have a 26 percent chance of suffering flood damage over the normal 30-year life of a loan according to FEMA.
There are two broad classifications of special flood hazard areas: 1) "A" zones, and 2) "V" zones. Detailed information about these zones is often found on Flood Insurance Rate Maps (FIRM's) using sub-classifications such as "AR," "AO" or "VO." These and other SFHA sub-classifications provide information about the pattern and characteristics of flooding in the specified area. Information about each of the Special Flood Hazard Area sub-classifications can be found on-line.
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Yours is a very interesting point and well presented. Below is the definition of SFHA taken directly from the FEMA website.
"Flood hazard areas identified on the Flood Insurance Rate Map are identified as a Special Flood Hazard Area (SFHA). SFHA are defined as the area that will be inundated by the flood event having a 1-percent chance of being equaled or exceeded in any given year. The 1-percent annual chance flood is also referred to as the base flood or 100-year flood." (http://www.fema.gov/plan/prevent/floodplain/nfipkeywords/flood_zones.shtm)
As you pointed out, exactly as the definition presented did, there is a 26% chance during a 30 year mortgage. Also, as per the definition presented above, nothing states that such an area will not be flooded every year or every couple of years; it's simply a statistical percentage developed to delineate the risk requiring special consideration and "higher" rates.
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