Many homeowners forced to buy flood insurance


Many of these people have lived in their homes for decades and never had any reason for concern, but suddenly the government says they're in a flood zone, and like it or not, they have to start paying into a national flood insurance program.

Adeline McKinnon has lived in her Sunnyvale house for half a century. Her daughter Marsha grew up there.

They never had any problem with rising water in this neighborhood, so the 84-year-old was shocked to get a notice from Bank of America saying her house is now in a special flood hazard area and she must buy flood insurance.

"Well, I don't like it because I can't afford it for one thing," she said.

The bank will charge her $2,400 per year for a policy, unless she buys one of her own -- and quick.

"I thought it was crazy after living here for 51 years; all of a sudden she's in a flood zone," said Marsha. "I mean, it's not like the house has moved anywhere."

No, it didn't move. So what happened? The Federal Emergency Management Agency, known as FEMA, just revised its flood maps using new digital technology. It can pinpoint exactly which properties fall into flood zones and which do not.

It shows Adeline's house just inside a blue-shaded hazard area. But she says it makes no sense. Her house always stayed dry even in torrential rains.

"What happens to my house? Nothing. I get a little puddle out front, that's it," said Adeline.

But there's no getting around it. If the map puts you in a high-risk zone and you have a federally-insured mortgage, the law says you must buy flood insurance.

"She has no money coming in. she's on Social Security, she barely has money for her groceries," said Marsha. "She's worried about that and so am I."

Premiums go into a big pot of money at FEMA to cover flood damage across the country, including major disasters like Katrina. But Adeline isn't expecting any disasters -- other than she can't afford the insurance.

Adeline is not alone. The new maps have pinpointed thousands more homes as flood risks for the first time, like Minh Tien's house in Milpitas.

He just got a letter from Wachovia Bank saying he's in a hazard area, too.

"They said that we need to buy flood insurance because we're in a flood zone, and I think the whole thing is kind of crazy," he said.

7 On Your Side has been flooded with complaints from consumers who don't understand why their homes are suddenly labeled a flood risk.

It means buying insurance every year and it can lower their property values. So we investigated and it turns out some maps may contain errors. The map of Minh's street is one example.

"There is a difference between the information we have and the new information provided by FEMA," said city engineer Fernando Bravo.

Bravo says the FEMA map of Minh's street isn't quite right. It shows Minh's house in a hazard zone when it's really in a safer zone.

The Santa Clara Valley Water District sent FEMA a letter saying it found similar map errors throughout the county and it asked for a wholesale map-correction process.

"If there's reason, information that suggests that our boundaries are not quite right, we work together with local communities, taking the best available information to try to redefine and make sure that the maps depict the hazards," said FEMA engineer Kathleen Schaefer.

And while Minh's house is in a flood zone, his next door neighbor's is not. That's because his neighbor hired a land surveyor for about $800 and proved his house sits above the flood plain.

FEMA agreed and issued a map amendment, pulling the specific house out of the flood zone, but not Minh's.

Turns out thousands of homes across the state have been granted similar map amendments.

So we checked Adeline's street and sure enough, her next door neighbor also hired a surveyor and got his house removed from the flood zone, too.

"Our FEMA maps use the best available information. Our maps are designed to show areas of high, low and moderate flood risk," said Schaefer.

Still, for homeowners it is guilty until proven innocent and some believe FEMA is just trying to sell its insurance policy to raise cash. FEMA's national flood insurance program fell $17 billion in debt after Hurricane Katrina.

A GAO report says FEMA's goal is to sell 5 percent more flood insurance each year. It even pays bonuses to insurance companies for selling more policies.

But FEMA says the purpose is to ensure coverage for those at risk.

"So folks know their flood risk and can build wisely in the flood plain or take appropriate action to protect their homes," said Schaefer.

So what can you do? If you think your house isn't really a flood risk, you're basically on your own. But you can go to your local flood control agency, and find out if there is an error in the FEMA map or hire a land surveyor to determine whether your house is above the flood plain. If so, you may be off the hook.

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