Flood insurance investigation leads to changes


Bogus flood zone maps have been forcing homeowners into paying thousands of dollars for insurance they do not need. Now Congress is voting on sweeping reforms because of 7 On Your Side reports.

Adeliene McKinnon, 84, has lived safe and snug in her Sunnyvale home for 51 years when suddenly and without warning the government said her home was in great danger.

Bank of America sent McKinnon a notice saying her house was now in a "flood hazard area" and she must pay $2,400 per year for flood insurance.

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

So what changed?

New digital flood maps created by the Federal Emergency Management Agency (FEMA) can now pinpoint exactly which houses are in a flood zone. A map put McKinnon's house just inside the blue shaded area designating a flood zone.

This is important because federal law says anyone owning a house in a hazard zone with a federally insured mortgage must buy flood insurance.

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

Most people just pay up but others have disputed the accuracy of the maps.

Officially, McKinnon's house is in a flood zone and yet her next door neighbor's home is not.

How can that be?

The neighbor hired a surveyor who proved the map wrong. The house actually sits above the flood plain.

But as far as officials are concerned, McKinnon did not dispute the map, so her house is still in the flood zone, requiring her to purchase $250,000 in coverage even though the balance on that federally-backed loan is only $13,000.

Rep. Jackie Speier, D-Calif., saw 7 On Your Side's stories and promised action. Now, that is exactly what she's providing.

"We have a House bill moving to the floor that's going to take care of most of the issues you brought to my attention," Speier said.

Speier proposed a couple of changes inspired by McKinnon. For one thing, banks could not make someone buy more insurance than their mortgage is worth. They would be slapped with a fine if they did.

The bill also says if a new map suddenly puts a house in a flood zone, the owner gets five years notice before they must buy insurance.

Now, homeowners must pay the premium up front in one lump sum. Under the House proposal, low income folks could pay in installments. Speier wants to make that true for everybody.

Finally, homeowners feeling wronged would have someone on their side. The legislation puts a consumer advocate within the huge bureaucracy of FEMA.

"If you believe you are not in a flood zone you are going to be able to appeal and there is going to be a consumer advocate created within FEMA to address consumer complaints," Speier said.

The flood insurance bill still faces a tough fight on the House floor and the U.S. Senate.

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