When the Army Corp of Engineers and NFIP came up with the 100-Year Flood and 500-Year Flood designations, it’s almost as though they wanted to confuse the public. With Hurricane Harvey, much has been written on the meaning of the terms 100-year flood (it means a 1% chance of flooding in a single year), and the term 500-year flood (a 0.2% chance of flooding in a single year). While these basic definitions are correct, they don’t really help homeowners, whose question is: what’s the chance that my house will flood while I own it?

In the case of the 100-year Flood Zone, this means that the chance of flooding is at least 1% in a single year. But what if you plan to own your home for 30 years? In this case, you have a 99% of NOT flooding each year, but you’ve got to NOT flood for all 30 years. The probability of NOT flooding over 2 years is 0.99 * 0.99, and thus the probability of not flooding over 30 years is 0.99^30, or 74%. This means that the home has a 26% of flooding over the 30 years in question.

Of course, that doesn’t take into account the change in probabilities resulting from a combination of climate change and reckless development in most American cities. According to Kenneth Trenbeth, a scientist at the National Center for Atmospheric Research, “What used to be a 500-year event has become a 50- or 100-year event.” With this in mind, we can lay out the following table of homeowners’ flood risks:

The flood risks over 30 years likely exceed many homeowners’ assumptions even before accounting for climate change – the climate-change adjusted risks make flooding within flood zones a virtual certainty! Homeowners in these areas are well advised to buy flood insurance, which is an incredible value as it is priced by the government below fair value. Homeowners not in, but simply near the 100-year floodplain, should realize that THEY are now likely in the true 100-year flood risk area, while their neighbors in the floodplain are likely at much greater risk.

Think that the probabilities can’t possibly have shifted that much? Consider that parts of Houston have had 3 500-year flood events since 2001 – Harvey, the 2016 Tax Day Flood, and Hurricane Allison. The chance of having one such “500-year” flood in 16 years is around 3.2%, but three such events? It’s less than 0.15% if these are really 500 year floods! [1] The reality is that 500-year floods are likely more than 10 times more common than the old statistics indicate, and homeowners should plan accordingly.

[1] The chance of 3 or more 500 year floods is equal to 100% minus the chance of 0, 1, or 2 such floods. The chance of 0 floods is 96.85%, and the chance of exactly 1 flood is roughly 3%, leaving less than 0.15% for the other potential outcomes (which drop off very rapidly because of the 0.2% chance happening multiple times).