I got a letter from my mtg company saying flood coverage is required. Apparently, I'm in Zone A. What can I do about this? I can't afford hundreds in additional premiums - I already have to shell out for my mortgage, my homeowners coverage and my property taxes! Please advise.

Well, you can have a surveyor come out and do an "elevation certificate" to see if maybe they're wrong. It will cost about $750.

The thing is, likely they aren't wrong, then you're out the $750 AND have to buy flood insurance.

Question - is this a new loan, or did you recently drop the flood insurance? Usually, if you're not required to buy flood insurance when the loan paperwork is originally signed, they can't change their minds later. So pull the original documentation out, to see if flood coverage was required when you signed the loan.

If you're in a certain flood zone, and "A" is one of them, and you have a federally backed loan then you are required to have flood ins. If you don't get it the bank will just force place it on. All the rates for flood are the same. Many companies offer it but it's all under the N.F.I.P. The bank just wants the same amount of coverage as your loan amount. There is no sense in shopping it sense rates are set by N.F.I.P. But see what's the highest deductible your bank will let you get away with to get the rate down. You only need building cov., not contents to satisfy the bank. And zone "A" does not qualify for the "preferred program" package rating.

Your home owners agent should be able to tell you. It probably depends on which state you live in. In Texas you have to purchase flood insurance through the State. My agent gave me that information.

You have two options:

1. Dispute your flood zone status with FEMA. You can start this process at their website. Be aware that there will be lots of paperwork and requirements - possibly a survey (that costs money) to determine your elevation and stuff like that.

2. Buy insurance - the rates are cheaper than you think and you are only required to get coverage equal to the principle balance still due on your house. Your mortgage company can tell you what the balance is.

I just got a letter a week ago, too. Just to give you an idea of what rates are like, I purchased $62,000 in coverage for my home - that's my mortgage balance. I did not get coverage for contents. The annual premium is $608, so that's about $50 per month.

I've read that it might actually be cheaper to get building coverage together with contents coverage, so I may check into that this week to see if I can lower my rate even more.

Best of luck. I know it seems unfair, but the mortgage company has its way because technically they are on the hook for your loan, and they probably own "more" of the house than you do anyway, so they are just trying to protect "their" property.

Ultimately, if the bank that holds your mortgage is requiring you to get flood insurance you are going to have to get flood insurance. You can either do this yourself or have the bank place the coverage for you (not the best idea). You can argue this issue with your bank, but I doubt they will budge...

Many insurance companies have flood riders especially if you are in a flood area. The federal government and/or the state may also has a flood policy that you can purchase. I f you are located in a flood area you will be required to purchase the flood insurance, just shop around and find the best buy for your money.

Risk cover is always better but do not opt it blindly or someone asked for it. Evaluate the risk element and then go for it if necessary. Convince your mortgage company.