Living in the Outer Banks has many pleasures and benefits, but coastal living also comes with challenges.  If you’ve been shopping for a coastal property, whether for a full time residence or second/investment home, you’ll have heard terms such as flood zones, base flood elevation (BFE) and the national flood insurance program (NFIP), most of which probably never came into consideration during previous home buying excursions.

The reality is that flooding is a challenge for any community located near a body of water, whether it be a river, stream or ocean.   Surprisingly, the majority of flood insurance claims come from inland flooding compared to hurricane and storm related claims.  That’s because some communities, like the Outer Banks, have strict building codes in place that help protect property owners in the event of a storm.  Homes built on pilings, elevated structures and hurricane rated or impact resistant glass are just a few of the features you might find with construction on the Outer Banks.

Flood Zones

Not surprisingly, every property in the Outer Banks is in a special flood hazard zone or SFHA.  However, just because your property is in a SFHA does not mean it will be in imminent danger of flooding.  

There are three (3) flood zones in the Outer Banks:  X, AE and VE.  And to complicate matters further, there are a few spots in the Outer Banks (for example the 4-wheel drive area of Corolla) that also fall under the Coastal Barrier Resources Act, or COBRA. Flood insurance through the NFIP is not available in these areas, so make sure to discuss the ramifications of buying in a COBRA zone with your REALTOR®  before signing on the dotted line. 

X.  An X flood zone is about as good as it gets, because properties located in X flood zones are considered at minimal risk of flooding.  This also means that your lender will not require flood insurance, although we encourage all Outer Banks homeowners to carry it.   Additionally, the building codes for X flood zone properties allow for living space on the ground floor, offering a nice convenience for homeowners.   If you’re lucky enough to find a property in an X flood zone, great.  However, don’t let this be the driving force behind your decision.  There are plenty of high-elevation, properly built homes in AE flood zones that will keep you high and dry as well.

 AE.  The majority of properties in the Outer Banks fall into AE flood zones.  According to FEMA, properties located in an AE zone will have an annual likelihood of flooding of 1% (assuming they are at or above base flood). When in an AE flood zone, BFE, or Base Flood Elevation becomes an important factor.   For example, if your home is located in an AE flood zone with a BFE of 9, the first habitable living area should be 9 feet above base flood.  That said, if the property you are considering is in an AE flood zone you should be aware that your flood coverage begins on the first elevated floor of your property.

VE.   The majority, if not all, oceanfront properties fall into the category of VE, although some sound front properties, especially on Hatteras Island, can fall into this category as well.  VE flood zone properties are at higher risk from rising waters and wind driven wave action, which generally translates to a higher flood insurance premium.  However, as is the case with AE zones, your premium will be a factor of the elevation of the property among other things.  If you are considering buying a VE flood zone property, the higher the elevation of the property the better positioned you will be in terms of storm protection. 

The National Flood Insurance Program

The National Flood Insurance Program was founded in 1968 for the purpose of enabling property owners in participating communities to purchase affordable flood insurance.  Flood coverage through the NFIP is available up to $250,000 and premiums will be determined on some of the factors noted above.


To be sure, flood zones and flood insurance can be quite complicated.  Additionally, Hurricane Katrina and most recently Hurricane Sandy have put a strain on the program, and changes are coming.   If you are interested in learning more about flood insurance and flood zones, and want to understand how they might affect your home purchase, please give Coastal Outer Banks Realty a call at 252-489-2140.  We pride ourselves on our knowledge of the Outer Banks market and will work with you to find the ideal property that meets your needs.  In the meantime, stay tuned for “Questions to Ask Your Insurance Agent”.