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JACKSONVILLE, Fla. – St. Johns County resident Charlene Walls paid her expensive flood insurance premium for years without questioning whether it was too high.

After all, her home is in a subdivision close to Cunningham Creek and the St. Johns River. Flood insurance is a price she’s willing to pay for living near water.

But when she became curious about whether she was being billed too much, her insurance agent came back with some startling information. Instead of paying $1,173 per year, she recently got a discount that knocked her premium down to $317. It turned out Walls should have been getting a low-rate “preferred risk policy” since 1996.

Since discovering the error, Walls she said she’s found neighbors who also have been paying the higher premiums, even though their homes aren’t rated at high risk for flooding.

“I’m just wondering how many people are in the same boat,” she said.

“They’re just getting the bill each year and paying it, assuming that it is what it is.”

Walls and husband Bruce get their flood insurance through the National Flood Insurance Program, which is federally subsidized and administered by the Federal Emergency Management Agency.

Florida is far and away the No. 1 state for the flood insurance program, which fills the void left by standard insurance policies that don’t cover damage from rising water. Nationwide, the program covered about 5.6 million policies in 2007. Florida accounted for 2.2 million of those policies, or 40 percent.

FEMA spokeswoman Jody Cottrill said based on the Walls’ home being in a low-to-moderate flood risk zone, they should have been getting the preferred risk policy all along.

She said there have been other scattered cases where property owners eligible for the preferred policy risk rates are incorrectly charged higher rates.

“It does happen, but it’s not something that’s habitual,” she said.

She said the responsibility for making sure property owners are billed correctly rests with the insurance agents who sell the policies. She said FEMA does not refund money from prior years if policyholders have been paying too much.

The Walls have been purchasing their flood insurance from Harden & Associates of Jacksonville since they built their Fruit Cove home.

Joe Rudi, director of the personal insurance division at Harden & Associates, said the agency recently became aware of a client who should have been getting a preferred risk policy over the past decade. He declined to identity the client by name, citing confidentiality of customers.

He said the home correctly was classified in the client’s insurance records as being in a flood zone that qualifies for the low-cost policy.

He said a review hasn’t pinpointed exactly why the client wasn’t put into the proper policy rate, but the original application was processed at a time when the flood insurance program did not have the same kind of computerized system as it does today.

“To say the least, the process definitely left open the potential for human error,” he said.

He said the agency has contacted FEMA and Travelers, the company servicing the flood insurance policy, about getting a refund for the client’s premiums. As it stands, he said, the only refund for the client is the overpayment for this year. He said Harden & Associates has launched a review of all customers’ flood insurance polices to see if anyone else should be getting a preferred risk policy.

Walls said she’d never heard of the preferred risk policy until her mother, a Jacksonville resident, learned she could get that coverage for her home in Ortega. Walls said her mother was applying for a reverse mortgage when the lender reviewing her property pointed out that she was paying more than she should for flood insurance. The changed dropped her annual premium to $264 from its former rate of $906, according to statements from State Farm.

Walls said both consumers and agents should be reviewing flood insurance polices to ensure policyholders are getting the premium rate they should.

“When it happens to my mother and it happens to me, I don’t think we’re the only people in the city it’s happening to,” she said.

Checking Your Flood Insurance Premium

National Flood Insurance Program offers a low-cost preferred risk policy to property owners in areas that have a low or moderate risk of flooding. Here’s how to check whether you’re entitled to that kind of coverage.

Check the flood insurance policy to see if it’s labeled as a preferred risk policy. — If it’s not labeled that way, find the Flood Insurance Rating Map (FIRM) zone on the policy. The rating of B, C or X means the property stands a low to moderate risk of flooding. Most property owners in those zones are eligible for preferred risk.

If the FIRM zone is not B, C or X, it’s not eligible for preferred risk.

To double-check whether your home is classified correctly on your policy, go to On the left-hand side, type in your street address and whether your property is residential or not, and then click “Go.” The Web site will tell you whether your property is considered a low to moderate risk for flooding. If it is, then you probably qualify for a preferred risk policy.

To get preferred risk coverage, the property must be nonresidential or residential for one to four families. Residential condominium associations are not eligible. Also, property owners can’t get preferred risk rates if they exceed various limits on flood insurance claims and disaster relief payments.

For more information about the National Flood Insurance Program, go to or call (888) 379-9531.

Source: Federal Emergency Management Agency