Average Annual Damage. Depending on its size (or severity), each flood will cause a different amount of flood damage. The average annual damage is the average damage in dollars per year that would occur in a designated area from flooding over a very long period of time. In many years there may be no flood damage, in some years there will be minor damage (caused by small, relatively frequent floods) and, in a few years, there will be major flood damage (caused by large, rare flood events). Estimation of the average annual damage provides a basis for comparing the effectiveness of different floodplain management measures (i.e. the reduction in the annual average damage).