Q: Your recent article about underinsured homeowners mentioned low-cost flood insurance for as little as $112 per year.

I live in Farmington Hills, Michigan, and I’m paying something like $1,500 per year. If I’m paying $1,500 per year for a property located in Farmington Hills, Michigan, what are people located on the ocean paying?

It just doesn’t seem fair to me.

A: I’m glad you asked this question, because it’s possible that you’re simply overpaying for what you have.

First, you should know that in the wake of the devastating hurricanes of 2005, insurance companies all the premiums of homeowners insurance policies around the country, as a way of recouping some of their lost investment.

Rates are set individually, based on several factors: how often you have made a claim, your credit score, where the property is located, how old it is, if you’ve made any safety improvements, if you smoke, etc.

Flood insurance premiums are based primarily on where the property is located, although other factors come into play. The low-cost insurance premiums that I mentioned come directly from the FloodSmart.gov website. I presume that they are for people who are located in areas that never flood rather than for people who are located on the ocean. Also, the Federal Government only offers flood insurance up to the first $250,000.

(Other insurers offer private flood insurance above this amount.)

Any one of those factors can drastically change how much your homeowners’ policy costs. For example, if your credit score drops, your homeowners’ insurance premium might go up significantly: Industry research has shown that people with lower credit scores typically file more claims.

It could also be that it’s time to shop around.

Here’s what happened to my husband and me. We got our new insurance bill a few weeks ago and it went up 50 percent. That’s after a huge increase last year. My husband called our agent who went around and got a couple of other bids.

By agreeing to put our auto, umbrella liability and homeowners’ insurance with the same company, we were able to shave our total insurance bill by 60 percent. Also, the fact that our credit score was high helped us qualify for a lower premium.

Our agent’s response? He was mortified. And, he should have been. He should have shopped this around last year.

I suggest you may want to talk to your agent about shopping around. If you have good credit it may help a lot more than you think.

Meanwhile, when it comes to flood insurance, the price you’re paying seems high. But there, too, you may be entitled to a better deal. Check out www.floodsmart.gov and see if you can’t shop around for something less expensive that meets your need.

Feb. 9, 2007.