With a loan approval letter yesterday there was a condition that we are required to purchase flood insurance since our property is in a high risk flood zone - AO to be specific.
My first reaction - Flood zone in Willow Glen, San Jose? I thought we lived in a desert and barely got any rain.
Second reaction - Flood insurance premium for the minimum required $250,000 coverage is $2100 per year! WTH! And why the heck is this mandatory as per federal law? This just seems like a government scam to me. :(
Any advice on how I could get out of this? It might be a deal-breaker for our home purchase.
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FollowBefriend (1)2 threads324 comments Sunnyvale, CA
Without evidence to the contrary the insurers assume that you're as low as you can be and charge the highest rates for your flood hazard area. That evidence comes in the form of an Elevation Certificate.
Find out if the current owners have an Elevation Certificate and if one exists use that for a quote. Otherwise investigate having it surveyed for one. I was quoted $700, although I don't know if it would be possible to pay less just for the measurements without a certificate if the numbers won't translate into lower insurance rates.
Parts of Sunnyvale are in a flood plain too (there's a big ditch with a trickle of water in the middle half a block towards San Jose from Fair Oaks which is allegedly a creek).
FollowBefriend (31)34 threads2,542 comments San Jose, CAPremium
This stupid thing happened to me when I refinanced my house a couple of years ago. I bought the flood insurance, got the refinance done, then contested it and won. I had my flood insurance policy cancelled shortly afterward.
I bought the flood insurance for around $680/year, but I understand that flood insurance went up recently to around $1,000-$1,100/year. $2,100/year is a rip off. Give Doug Millsap with Farmers Insurance a call & he'll take care of you. His number is 408.978.1224.
Google for FEMA flood map. Type in your home address and it will let you know whether or not you're in the flood zone. Contest with the lender if it's not. If it's close, but not in a flood zone, and the lender still insists, you can get a $250,000 coverage for only $350/year.
Disclaimer: I don't get paid for referrals. My whole family has been buying insurance from Doug and his dad for over 20 years. They are really nice people and very responsive to your needs. Give Doug a call.
Good luck. :)