7 On Your Side helps family forced to buy flood insurance in San Martin

SAN MARTIN, Calif. (KGO) -- A family that has lived in their Santa Clara County home for 28 years was told for the first time last year they live in a hazardous flood zone. The new designation meant they would have to purchase expensive flood insurance, until they called 7 On Your Side.

Changes in flood zone designations can be costly for homeowners. If you receive such a designation, it could be worth your time to review it closely.

A dry creek bed sits 15 feet from the home of Luanne Giacalone in San Martin, south of San Jose. It's the reason her home is designated to be in a high hazardous flood zone and it's the reason her lender -- Bank of America -- required her to purchase flood insurance. Giacalone says even after heavy rains, the water has never been that high.

"It's never been more than 18 inches. I would say anywhere from 14-16 inches," Giacalone said.

Luanne lived in this home for 28 years before Bank of America decided to impose a flood insurance requirement. The folks at the Federal Emergency Management Agency say that's not uncommon.

Sometimes a new requirement for flood insurance can be triggered by a change in the flood insurance maps. In this case, FEMA says there's been no change in the flood maps since the early 1980s.

It's likely an audit prompted the change since insurance is required for any home in a hazardous flood zone. It's all to protect against the 100 year flood which has a one percent or greater chance of occurring each and every year.

"You can also consider that over a 30 year mortgage. It's a flood that has a 26 percent chance of occurring during those 30 years," FEMA engineer Eric Simmons said.

Giacalone still wasn't convinced she needed the flood insurance. So she hired an engineer who did a site survey and confirmed the home was elevated high enough that it was not in flood danger.

Luanne submitted the new information and FEMA agreed with the engineer. However, FEMA has no regulatory power and the ultimate decision was still with Bank of America.

Bank of America says it didn't receive the new information until this January. Giacalone says she submitted it to the bank six months earlier, and resubmitted it over and over and got nowhere. That is when she called 7 On Your Side.

We contacted Bank of America and it sent Giacalone a refund for $3,100 worth of insurance. She must still insure a shack, which was not included in her site survey. She's agreed and is ready to move on, although the bank offered to pay for a second survey.

"What you do to protect consumers, it's remarkable," Giacalone said.

The first site survey cost Luanne $750, but she's gotten $3,100 in return -- so it was worth it.