Residents Told To Buy Flood Insurance

Published: Wed 13 Jan 2010

Perry Begay

Thousands of Southern Californians for the first time face paying flood insurance premiums up to $1,700 annually after the federal government determined they live in areas now designated as flood plains.

Residents with federally backed mortgages and living in low-lying regions, near rivers and creeks, or below dams were notified after changes occurred in map updates by the Federal Emergency Management Agency (FEMA). In Southern California the properties are in more than 150 cities and unincorporated areas of Los Angeles, Orange, Ventura, Riverside and San Bernardino counties.

The insurance with annual premiums starting at $500 annually is required for the mortgages owned or guaranteed by Fannie Mae and Freddie Mac. Half of the mortgages in the country are in this category.

Almost 90 private insurers offer flood insurance in coordinated efforts with FEMA's National Flood Insurance Program. Congress approved the program in 1968.

Since 2003 FEMA has been rolling out new maps to determine properties most likely to be on the losing end if the 1 percent likelihood of a flood occurs in a year. As a result, more homes in much of the United States are now considered in these areas.

Needless to say, homeowners are angry about paying for insurance with the potential for never filing a claim. Some even have created groups to challenge their being told to buy the insurance.

FEMA notes that the maps are created through a process in which local flood-control districts can tell representatives from the federal agency whether mistakes have been made. Some local municipalities already are hiring their own experts to prove the maps in their areas are erroneous and FEMA has changed the designations back to their original status.

In some areas, it has been four decades since flood-zone maps were done. The new methods incorporate digital mapping technology that takes into account the topography of the area as well as its climate records.

Part of the consideration are existing structures designed to prevent flooding, including canals, levees and drainage systems. After levees broke in New Orleans due to Hurricane Katrina, levees throughout the country were checked and decertified due to inadequacies. Such decertification also allows homes in the adjacent areas to be added to flood plains.

Besides having to pay more money, residents have complained about how they were notified of the changes. FEMA says the local governments had been asked to notify residents about the proposed changes and set up systems for public comments. Not so, say some. One resident said she found out when her mortgage lender notified her that she had 30 days to get her flood-insurance policy.