Santa Cruz County Home & Community Information


Flood Insurance Rates Going Up for Santa Cruz Homeowners in Flood Zone


Do you own a home in a flood zone in Santa Cruz?  If so, is is likely that your flood insurance rates are going to rise and in some areas quite dramatically. In 2012 congress passed the Biggert-Waters Flood Insurance Reform Act.  This act of congress will increase flood insurance rates on most homeowners in a flood zone. The government and FEMA had been subsidizing flood insurance rates and after Katrina and Hurricane Sandy, FEMA is billions of dollars in debt.  For now, it appears that the government can no longer subsidize flood insurance premiums and the rates will now reflect the true risk.

When will the increase in flood insurance premiums take place?

The increase in flood insurance rates had already started.  When your flood insurance policy is next up for renewal that is when you are likely to see the new rates - this will begin in 2014.  

How much will the increase in flood insurance rates be?

The amount of your flood insurance rate will depend on what kind of flood zone you are in and elevation.  Some people will see a 5% increase each year for 5 years, others will increase by 25% a year until they reach full risk premiums.  If you own an ocean front home in Santa Cruz that is at a lower elevation chances are your flood insurance premiums will increase substantially.  

Examples of Flood Insurance Rate Increases in Santa Cruz county

A front row home in the Pajaro Dunes in La Selva Beach had their flood insurance increased to over $30,000 a year.  Another home on Beach Drive in Rio Del Mar was over $24,000 for flood insurance per year.  In the Adult Village in Watsonville - an area near the levy and below river level, the flood insurance premiums went from about $800 a year to $5000 a year for a particular home.

What does the increase in Flood Insurance Rates mean for the Santa Cruz Real Estate market?

We have many homes in flood zones in Santa Cruz, homes that are near rivers and creeks and right on the ocean.  There will be many homes that are affected by this new law in Santa Cruz county.  There have already been real estate transactions that have fallen apart because of this new law and rates.  There are some homeowners that will not be able to afford this increase in flood insurance rates, for example seniors on fixed incomes.  Some people may be forced to sell their home.  The values of homes in flood zones in Santa Cruz county will be affected.  If a buyer has to pay a huge flood insurance premium they will want to be compensated on the home price. 

What can you do?  

Contact your home insurance agent to see what you new rate might be.  You can also order a Elevation Certificate that may show that your home is not in a severe flood zone and be able to reduce your flood insurance premium.  You can contact me for more information about flood insurance rates and how you home's value may be affected at 831.419.9345 or via email and



Authored by Jessica Wallace, Santa Cruz Realtor

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Jessica Wallace
Coldwell Banker
831 419 9345
Licensed In: Ca
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Comment balloon 3 commentsJessica Wallace • January 30 2014 11:39AM


After watching Washington Journal one day last week It confirmed that flood insurance will rise probably higher than the actual water does.  It's time once again for a taller pair of boots Jessica. 

Posted by Kevin J. May, Serving the Treasure & Paradise Coasts of Florida (Florida Supreme Realty) about 5 years ago

It's very important to have flood insurance, safety first as always, but insurance company should have a better rates specially to those who have fixed income.

Posted by Katerina Gasset, Get It Done For Me Virtual Services (Get It Done For Me Virtual Services ) almost 5 years ago

Good morning Jessica! I agree Katerina, safety is very important nowadays. This is an awesome blog. Keep it up!

Posted by Waynette Hoover Araj, Connecting your Dreams with the Right Real Estate (Keller Williams Realty) almost 5 years ago

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