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If you’re required to have flood insurance, be sure to shop around

If you’re required to have flood insurance, be sure to shop around

Alyssa Grant bought a Huntington Beach home in 1999. Her new home was not in a designated flood zone. No flood insurance needed. No problem.

Hurricane Katrina hit the Gulf Coast in 2005.

Afterward, Congress updated the 1968 National Flood Insurance Program, including the flood maps.

Among the changes: Grant’s four-bedroom, two-bathroom home got added to a flood zone.

In 2009, Grant’s flood insurance nightmare started, requiring her to pay a little less than $ 500 per year.

Insurance charges kept escalating each year, partly due to reduced government subsidies. Today, Grant’s mandatory flood insurance policy is costing her $ 3,375 per year, nearly matching her $ 3,700 in annual property taxes.

To make ends meet, Grant rented out her home and moved to much more affordable quarters.

“This was the only way I could afford to keep my home,” Grant said. To this day, she’s living in a one-bedroom apartment because of the flood insurance’s crushing cost.

Orange County has almost 30,000 parcels that are in a flood plain (which may include some businesses). Of those, there are almost 17,400 properties (58 percent) that are covered by flood insurance, according to the Orange County Public Works Department.

If you own your home free and clear, you do not need to have flood insurance.

But, said Mary Simms of the Federal Emergency Management Agency, “a lender can require flood insurance, even if it is not federally required.”

It turns out there is a huge private market for flood insurance, perhaps at more competitive prices than national flood insurance companies.

“I didn’t know I could go outside of FEMA,” Grant said.

Evan Hecht, CEO of The Flood Insurance Agency of Florida, provided me a quote for Grant’s property at $ 2,109 per year. That’s $ 1,266 less than her current policy, more than a one-third cost savings. Holy cow!

Don’t let your mortgage lender arrange your flood insurange for you, Hecht said.

“If you shop for it yourself, you can find cheaper insurance.”

Rancho Cucamonga insurance broker Wendy Holt of Holt Insurance explained that you can still fill out an elevation certificate form and pay a surveyor to possibly realize another reduction in your flood insurance bill.

Thoroughly investigate any property you are considering before you write an offer.

Mortgage broker Jeff Lazerson can be reached at 949-334-2424 or jlazerson@mortgagegrader.com. Twitter: @mortgagegrader_

The Orange County Register – News Headlines : Real Estate News