Drowning in flood insurance legalese

June 10, 2012 10:30 AM

I think I'm being scammed by my mortgage company to purchase flood insurance even though I feel certain I'm not in a flood zone. Do you have experience with this? Is their claim likely to be true? Is there an easy way for me to verify or disprove their claim?

I'm 10 years into my 30-year home mortgage loan. My loan was originally through Countrywide, but they sold it to Coastal States. Within the past few months it was sold again, this time to GreenTree. I received a letter from GreenTree telling me I MUST purchase flood insurance. I've never needed flood insurance in the past, and I've never heard of this area flooding. I live in the middle of a large city in a desert area. There isn't a river, wash, or even a canal within miles of my home. According to GreenTree, my home is located in a Special Flood Hazard Area as determined by FEMA. I went to the FEMA flood map web site, hoping I could just type in my street address and FEMA would provide me with a clear answer, but the site was gibberish to me.

I was going to ignore the letter from GreenTree, but now they've followed up with a second letter warning me of "impending placement of insurance" which apparently means they can bill me for the flood insurance that they will purchase on my behalf - oh, and by the way, their purchase would be made through an "affiliated insurance agency that will earn a commission on the insurance policy." The only way out of this is to purchase my own flood insurance or to prove through official FEMA documentation that my home is not in a flood zone.

I'm beginning to panic and that's making it difficult for me to read through and comprehend the dense text on the FEMA site. Can anyone toss me a ring buoy?

posted by kbar1 to law & government (17 answers total)

FEMA might be able to help determine if you're in a flood zone.

If you determine you ARE in a flood zone, do not let the bank impose a policy on you, purchase your own insurance.
posted by HuronBob at 10:42 AM on June 10, 2012 [1 favorite]

Try going to this site and entering your address in the upper left corner. That should get you the official FEMA flood maps for the area around your address. Carefully consult the legend in the upper right.

I just want to note that just because you are in an arid area and far from a water way doesn't inherently make the flooding claim inaccurate. However, a quick web search reveals that Green Tree is aggressive about trying to add payments to your mortgage. I think you'll need to call them and wade through the service center morass demanding supervisors until they agree to wave the requirement or send you documentation in writing establishing factually that you are in such a hazard area. Record when you called and the identity of everyone you talk to.
posted by meinvt at 10:42 AM on June 10, 2012

The main FEMA Map Service Center page, in the upper left, has a spot where you can enter in your address and it will generate the Flood Maps for your address. You can view / zoom the map using the tools on the left when it comes up.

It might be interesting to note that it appears the maps they are using are at least a decade old if not more. My house / neighborhood is 10+ years old, but the images they use for the map I generated for my address have nothing but farmland. Not sure how that affects the validity of the maps it can generate, but it would seem to me if this is coming directly from FEMA, you might be able to leverage this in some way?

I was in a similar situation in my previous property because the area I was in was actually in a minor flood plain - but I had to get some sort of waiver or convince the mortgage company to not require it because the condo I was purchasing wasn't on the ground floor. I got around it but it was so long ago (1993) I don't specifically remember what I had to do... I just remember it was kind of a pain but not deal breaking.

Also, I'm assuming you have existing homeowners insurance? Have you spoken with your insurance agent about adding in flood insurance and how much it would cost? I seem to remember my agent indicating they wouldn't even sell it to me because my current property wasn't in a flood area.

On preview - Ditto!

Good luck!
posted by SquidLips at 10:45 AM on June 10, 2012

I just want to echo Huron Bob -- you absolutely should not just let their placement of insurance go through. Any insurance they buy on your behalf is likely to be much, much more expensive than any you get yourself.
posted by tyllwin at 10:48 AM on June 10, 2012

In addition to FEMA's resources others have listed, your county planning/zoning commission will be able to help you understand what is your flood risk. They can read the maps and data better than you and they also have every flood area in your city memorized.

It's hard to say more on the subject without knowing your address.
posted by michaelh at 10:51 AM on June 10, 2012 [1 favorite]

I don't know if they are required to provide it to you, but they likely have a flood certificate showing the property is in a SFHA. I would ask for a copy of that certificate to see what information they are working from. These certs come from third party vendors using FEMA data and are a lot easier to read than the FEMA maps so if you can get that it will help. I'm not aware of a way to get one on your own.

If you think the flood determination is wrong, you'll have to get FEMA to issue an amendment. If it is correct, definitely get your own insurance as other responses as noted; force-placed insurance is pretty much always a rip-off.

Also the Floodsmart website is more consumer oriented and may be easier to wade through (ugh, no pun intended) than the FEMA site.
posted by tinymojo at 10:54 AM on June 10, 2012

I found this site a bit more useful: https://hazards.fema.gov/wps/portal/mapviewer as the other one wouldn't pull up a map over our exact street address.
posted by wkearney99 at 11:06 AM on June 10, 2012

If you are in the flood plain don't waste your time trying to get an amendment.

FEMA is not going to issue an amendment unless you build a levee around your house that meets the 100 or 500 year flood standards. Everyone who has to buy flood insurance thinks that FEMA flood maps wildly overestimate the extent of the flood plain but they truth is that they wildly underestimate the extent. Remember that you are dealing with floods that occur, on average, once every 100-500 years and the maps are modeled and constantly refined and amended as better information becomes available (better mapping, flood information, flow data etc). Showing up and saying "well I've lived there for 8 years and it's never flooded!" is a waste of your time.

For reference in the 1800s there was a flood in Central CA so big that the tide could not come in the Golden Gate for 6 days because of the volume of freshwater pouring out. Most of the Central Valley from Sacramento south was underwater, about 40' of it. Pretty much all the marine life in the Bay died. Ask someone who lives there now and they'll say it "never floods"! FEMA knows that ain't true.

btw, if you live in CA local planning councils were playing silly buggers with the flood maps for years to allow development in flood plains. FEMA caught them and now thousands of homeowners have to buy flood insurance. It's only $100/mo and since the entire Valley is a bathtub it's a pretty good investment imho.
posted by fshgrl at 11:19 AM on June 10, 2012 [5 favorites]

A lot of flood maps have changed over the past few years. When I lived in Florida it was required to have a flood survey done before obtaining a mortgage. I think they cost about $200. So go to the FEMA site and check it out, if it's inconclusive, get an official survey.
posted by Ruthless Bunny at 12:37 PM on June 10, 2012

If your community participates in the National Flood Insurance Program, then the rates for flood insurance are set -- no matter who you choose to buy it from, they will sell it at exactly the same rate. If you are shopping for insurance, this makes it a lot easier. To find out if your community does this, go to this FEMA page, click your state name, and then find your area. Depending, it might be easier to to a Find (Ctrl+F) for your county name (for example, if you have MUD districts).
posted by Houstonian at 12:40 PM on June 10, 2012

Start here and click on Map Search. Zoom in to find your map. Yea, it's a pain but the info is there.

I'm angry too when I feel like I'm being forced to spend money unexpectedly, but this looks like a result of FEMA reassessing risk across the country as a result of flood and hurricane events in the last few years. More info at Floodsmart.gov
posted by snsranch at 3:33 PM on June 10, 2012

Everyone who has to buy flood insurance thinks that FEMA flood maps wildly overestimate the extent of the flood plain but they truth is that they wildly underestimate the extent. Remember that you are dealing with floods that occur, on average, once every 100-500 years and the maps are modeled and constantly refined and amended as better information becomes available (better mapping, flood information, flow data etc).

I agree, with the caveat that while (in my experience) FEMA wildly underestimates the extent of the floodplain, they are also also wildly imprecise about that extent. So a low area will be left out at the same time that their maps will show the floodplain climbing the side of a hill. Theoretically a lot of work goes into the mapping, but the FEMA mapping subcontractors I have met were fairly unimpressive and were doing unimpressive work. But I very much agree with Fshgirl's main point, which is that because the FEMA maps tend to downplay the floodplain extent (and have allowed rules to be manipulated to allow all kinds of development within floodplains), if you are smack in the middle of the floodplain don't waste time trying to get an amendment.

That said, in your situation I'd definitely want to see documentation from the lender to make sure they weren't playing funny games.
posted by Forktine at 5:03 PM on June 10, 2012

oh, and by the way, their purchase would be made through an "affiliated insurance agency that will earn a commission on the insurance policy."

This explains your sudden appearance in the flood zone. Greentree is scum and they're trying to push you into default. Contact a real estate lawyer ASAP.
posted by mikewas at 9:08 PM on June 10, 2012

I agree, with the caveat that while (in my experience) FEMA wildly underestimates the extent of the floodplain, they are also also wildly imprecise about that extent. So a low area will be left out at the same time that their maps will show the floodplain climbing the side of a hill. Theoretically a lot of work goes into the mapping, but the FEMA mapping subcontractors I have met were fairly unimpressive and were doing unimpressive work. But I very much agree with Fshgirl's main point, which is that because the FEMA maps tend to downplay the floodplain extent (and have allowed rules to be manipulated to allow all kinds of development within floodplains), if you are smack in the middle of the floodplain don't waste time trying to get an amendment.

This is the result of most of the original work was done in the 70's and 80's, when surveying for maps was precise at 20' countours. Meaning elevations were +/- 10' at best. Those days the only real way to get good elevation data was a guy with a theodolite and lots of time of his hands. Now we have radar and laser and GPS that make it possible to get elevations within 1' through clouds, vegetation and structures. It is really, really amazing. And the flood plain maps are slowly getting redone. By private developers who want to know if it is safe to build on their land. This is a very expensive process, thousands of dollars minimum for a small area. I have done a few of these and it aint easy. If your house is in the floodplain their probably is a good reason. Hire a surveyor to get a precise elevation on your house and if the flood plain is done with a 'detailed' study in your area you might get lucky and be above the flood elevation. I have seen it happen quite a bit, also seen it not happen and have had to tell more than one homeowner not only did they have to buy insurance but if it did flood they were going to be wiped out. You really need to get a civil engineer who deals with drainage issues to consult on this if you want to fight it, and it will be expensive. A minimum of 2000 or so I would guess and can go way higher.

Memail me if you have a more detailed technical question. This is part of what I do for a living.
posted by bartonlong at 10:26 PM on June 10, 2012

Thanks for all the input so far. I've now checked the maps on the FEMA site and on Floodsmart.gov. It looks to me like my home is in an area that is described as Zone X or moderate to low risk. The letters I've received from Greentree state that I am in a Special Flood Hazard Area (SFHA) - also known as a high risk area where flood insurance is mandatory.

As recommended by tinymojo, I'll ask Greentree to provide me with their proof that I'm in a SFHA. As recommended by michaelh, I'll follow up with city and county Floodplain offices.

If I'm reading the maps wrong and it turns out that my home is actually in a SFHA, I'll be shocked, and then I'll follow up with my insurance agent.
posted by kbar1 at 11:35 PM on June 10, 2012 [1 favorite]

I once had to deal with this, and the issue in my case was that a corner of my property dipped down into a flood level. But the house was well above that level. I just (I think) called them and told them that, and it was over with. Their software just tagged any property that touched a flood area without regard to where the structure was located.

So yeah, get the maps from the above links and check and see if the house is actually in the flood plain, rather than just some portion of the property.

On the other hand, flood insurance is cheap if you are in a low risk area, and might be well worth the price.
posted by gjc at 6:48 AM on June 11, 2012 [1 favorite]

yeah, I had gjc's experience -- was able to draw a map of my property, show how it lined up with the FEMA map, and clarify that the house was not in the (tiny corner of a) flood plain. one fax to the mortgage company took care of it, for me, but I was also pre-closing, so I they didn't have quite the leverage with me that they might with you.

(also note that FEMA has been redrawing all of its maps, so the fact that you weren't within some region previously is of no help in this appeal.)
posted by acm at 6:51 AM on June 11, 2012