"What would you rather have, a loan or a grant?" says Chimienti. "I lost my house and now I am stuck with a second mortgage on top of my original $520,000. So my total mortgage went up to $740,000. The new house will probably be worth I don't know maybe $620,000 or $650,000. So I am already belly up on my mortgage."

His monthly mortgage has climbed from $4,000 to $4,800. His flood insurance premium jumped to $2,200 a year from $1700, though once the house is compliant, his premium will drop to $400 a year.

Still, with two kids aged three and four and a third on the way, he and his wife are having to deal with the cost of a higher mortgage than they had planned for.

Storm's Real Legacy

A year after Sandy, victims affected by the storm are waking up to a harsh reality. You have to pay a heavy premium to live on a piece of paradise.

People who love the water and the beach just can't stay away from it. It is why any stigma related to buying homes by the water that develops soon after a big disaster such as Sandy typically fades over time, according to Miller.

Residents still largely see Superstorm Sandy as a once-in-a-100 years event. So they focus on rebuilding and move on. But if there is one takeaway from the recent disaster it is this. The odds of a massive disaster are low, but the damages are too heavy to ignore and the recovery process is a nightmare.

If you purchase flood insurance, your coverage is limited to $250,000. So if your home is worth more, you have to purchase additional insurance from private players, which is more expensive. If you have homeowners insurance, you will have to pay extra to get the right riders to ensure that you are adequately covered. Communities affected by the storms are redoing their building codes, making it possible that you might have to rebuild your home to be compliant.

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