Flood Insurance in Texas

Generally, most counties in Texas are susceptible to floods, which is the reason for flood insurance in Texas. It mitigates the impact of flood disasters in the state through insurance. Therefore, the need for flood insurance cannot be overemphasized, particularly if your house is located in a flood zone. A flood zone is an area with at least 1% possibility of being flooded in any given year, although floods can actually happen anywhere and not necessarily just in the flood zones. In addition, regular homeowners, renters, and commercial property insurance policies do not cover floods, even though it is one of the major problems in Texas. This is why individuals and businesses in flood-prone areas are encouraged to get flood insurance to avoid financial losses caused by flood damages. Typically, the flood season in Texas is between April and September.

Alongside private insurance companies, the National Flood Insurance Program (NFIP) also offers flood insurance to homeowners in participating communities and those established to be in the NFIP-designated floodplains. The Federal Emergency Management Agency (FEMA) is in charge of the NFIP.

What is Considered Flood Insurance?

Flood insurance is a type of special catastrophe insurance that covers losses directly caused by flooding, such as damage to properties. The Federal Emergency Management Agency defines flooding as a temporary condition of partial or total inundation of two or more acres of usually dry land area or two or more properties (where at least one of them is your property). Based on the FEMA’s definition, flooding could be an overflow of inland waters, abnormal and quick accumulation or runoff of surface waters from any source, and mudflows. Therefore, flood insurance provides coverage against flooding caused by any of the factors highlighted in the definition.

What is the Purpose of Flood Insurance?

Most parts of Texas experience different types of flooding (e.g., flash flooding - caused by intense rainfall, dam failure, or ice jam; dam breaks; dry wash). These floods typically occur in the flood zones of Texas but may also occur in other parts of Texas. This is why flood insurance was created, to help mitigate the effects of flooding, particularly for persons residing in areas of Texas that have at least a 1% chance of experiencing floods.

What is Flood Insurance for?

Floods are natural disasters that often occur without giving you adequate time to prepare, and even when you see the signs, you can not do much to stop them. Floods cause excessive damage and destruction to properties. In most cases, these damages are pretty difficult to completely recover from. Some damages caused by flood are permanent structural damages to walls and foundations, major loss of personal property, such as electrical appliances, floor coverings, furniture, and fittings. Flood insurance is designed to prevent financial losses associated with flood damage because your homeowners insurance, renters insurance, or condo insurance do not cover damages caused by flooding. For example, if you reside in a flood zone like Houston, Brownsville, San Antonio, Galveston, or Waco, getting just homeowners insurance may not be enough. This is because flooding is not covered under a standard homeowners insurance policy. You must check the elevation of the property, and if it is located in the flood zone, you will have to get flood insurance to avoid paying for flood-related damages out of pocket.

What are the Types of Flood Insurance in Texas?

The National Flood Insurance Program operates under the Federal Emergency Management Agency Flood insurance in the United States. It is responsible for flood insurance in Texas, alongside some private insurance companies. Under the National Flood Insurance Program, there are two types of coverage, including:

• Building coverage - covers the damages caused by flood to the insured building, including the building itself, its foundation, permanently installed carpet, central air-conditioners, unfinished flooring, electrical systems, etc. Speak to a Texas Property and Casualty Insurance agent certified by the National Flood Insurance to see the complete coverage list. Coverage is available for up to $250,000 for a residential building and $500,000 for a non-residential building (e.g., commercial property: office, house of worship, school, clubhouse, garage).

• Contents coverage - covers personal belongings within an insured building, including clothing, furniture, and electronic equipment (washers and dryers, carpets, food freezers, and the food in them). Coverage is available for up to $100,000 worth of personal belongings (contents) in the building and $500,000 for a non-residential building.

Do you Need Flood Insurance in Texas?

Yes. You need flood insurance in Texas to avoid having to bear financial losses for damages caused by floods induced by heavy or prolonged rain, melting snow, blocked storm drainage systems, coastal storm surges, or levee dam failure.

Why Do you Need Flood Insurance?

Texas is a flood-prone state. Almost every major city in Texas has a high risk of flooding. However, flooding risk is higher in two large parts of the state, including the coast and a wideband called Flash Flood Alley that extends through Central and North Texas. Texas coastal counties account for approximately 2,772,574 (23.7% of all) homes in the state. Approximately 10% of Texas properties are at substantial risk of flooding, while 19% of Texas homes (est. 2,219,365) are in danger of future expanded flooding due to climate change. Over the next 30 years, Texas flood-prone areas are expected to increase by over 16%. Around 7% (est. 836,000) of all Texas properties have suffered flood damage in the past. Approximately 25% of all Texas property flood damage occurs in the low-risk zones, outside the area mapped as “flood zones” by FEMA.

Since a standard homeowners insurance policy does not cover floods, FEMA recommends flood insurance as an optional coverage for all Texas properties located in the flood zones mapped by FEMA and the nearby lower altitude areas. Flood insurance helps protect you from financial losses that may arise from flood damage to your property and personal belongings within your home. It has been estimated that even one inch of water can cause $25,000 in water damage to your home. Consult with a licensed Texas Property and Casualty Insurance agent certified by the National Flood Insurance Program to discuss your insurance needs.

How Much Flood Insurance Do you Need?

With the projected increase in floods in Texas, every Texas homeowner and renter needs to get at least building coverage on their flood insurance policy. This will cover the damages caused by flood to the insured building, including the building itself, its foundation, carpet permanently installed over, and other physical features of the building. Building coverage covers damages up to $250,000 for a residential building and $500,000 for a non-residential building (e.g., office, house of worship, school, clubhouse, garage).

Whether your building is elevated or not is also a factor in determining how much coverage you need. For instance, if you stay on the upper floor of your house, you may not need as much coverage as the person who stays on the base floor. Discuss your needs with a licensed Texas Property and Casualty Insurance agent certified by the National Flood Insurance Program to get personalized information on how much flood insurance you need.

What Flood Insurance Coverage Do you Need?

Although both building coverage and contents coverage is necessary, the coverage you need depends on what part of the building you reside in. For example, an elevated house may not need as much coverage as a house that is not elevated, especially if it is located in a flood zone. In addition, consider the cost of rebuilding if it is totally destroyed by flood, although this may only apply to you if you stay in a high-risk area. The rebuild value of your home is usually determined by the size of your house, the quality of building materials used, and the cost of labor in your area.

Everyone interested in getting flood insurance actually needs building coverage and may also decide to get contents coverage as well. However, people that have valuable personal belongings in their homes may need to strongly consider getting content coverage because just building coverage will not cover their personal belongings.

Is Flood Insurance Required by Law in Texas?

Under Texas law, flood insurance is optional, but it is necessary to have it, primarily if you reside in flood zones in Texas. Homeowners insurance and renters insurance policies do not cover flood damage, implying that you would have to pay for losses out of pocket if you don’t have coverage.

If you have a mortgage on the property (residential or commercial) located in the flood zone, the lender will usually require that the borrower gets flood insurance, as part of the contract.

How Do I Know if Flood Insurance is Required?

If flood insurance is required by the lender, you get notified about the requirement in writing, as part of the contract for the loan. If you are not aware of any legally-binding requirements, you can find out if flood insurance is required, by searching the address of the property in the FEMA Flood Map Service Center.

How Does Flood Insurance Work in Texas?

Flood insurance is a special catastrophe insurance that involves protecting the insured from damages to their homes, commercial properties, and personal belongings caused by floods. It basically works like any insurance policy where the policyholder pays a premium yearly after their home has been assessed and the risk factors evaluated. The premium paid is most times determined by the property's flood risk and the deductible the policyholder chooses. For instance, a person residing in a low flood-risk area like Huntsville is likely to pay less for flood insurance than a person residing in a major flood zone like Houston. As long as the insured has paid up their premiums, they can then file claims in the event of flood damage. Upon filing the claim, it will be processed, and the insured will receive payment for the cost of the repairs and/or reconstruction of the property up to the limits:

• Residential Flood Insurance - up to $250,000 for residential dwelling

• Commercial Flood Insurance - up to $500,000 for direct commercial property

What Does Flood Insurance Cover?

Flood insurance covers flooding caused by any of the following:

• Overflow of tidal or inland waters

• Mudslides or mudflows caused by flooding comparable to a river of liquid and flowing mud

• Unusual and quick accumulation or runoff of surface waters from any source, like heavy rainfall

• Water currents exceeding normal, cyclical levels

• Collapse or destabilization of land along the lakeshore or any waterway caused by erosion or the effect of waves

Some items that flood insurance cover are listed below, although the extent of coverage mainly depends on your insurance contract with your insurer:

• Building and its foundation

• Carpet permanently installed over unfinished flooring

• Central air-conditioners

• Electrical systems

• Window blinds

• Furnaces and radiators

• Ranges, cooking stoves, and ovens

• Refrigerators

• Personal belongings such as clothing, furniture, and electronic equipment

• Carpets

• Washers and dryers

• Food freezers and the food in them

• Portable microwave ovens and dishwashers

What is Flood Insurance Good for?

Flood insurance helps you avoid having to pay out of your pocket for unplanned damage repairs and destruction to your property caused by a flood. Since your homeowners or commercial property insurance does not cover flood damage, you need some sort of protection, particularly if your property is located in a flood zone.

Flooding can be caused by many factors like heavy or prolonged rainfall, melting snow, blocked storm drainage systems, coastal storm surges, or levee dam failure. Damages caused by floods attract expensive repairs even if the flooding is mild. For example, you may notice loose or buckling floors and roof or foundation cracks after a flood. Having flood insurance makes you remain calm despite the damage because you’ll be assured that the damages will be repaired or replaced in a couple of days. However, this depends on your flood insurance coverage and the amount of your deductible. A licensed Texas Property and Casualty Insurance agent certified by the National Flood Insurance Program will give you relevant information on how you will benefit from flood insurance.

What Does a Typical Flood Insurance Include?

Typical flood insurance includes two types of coverage, including building coverage, which covers flood damages to the structure of the building like the walls, foundation, electrical systems, etc. The second type of coverage is the contents coverage which covers equipment in the policy holder’s house such as personal belongings, food freezers and the food in them, portable microwave ovens and dishwashers, etc.

Note that flood insurance only covers flood-related damages and not all water damages. Hence, flood insurance will not cover damages caused by broken water pipes or an overflowing shower tub, as those are not caused by floods. For example, damage caused by a sewer backup is covered only if the backup directly results from flooding. Discuss with your NFIP-licensed Texas Property and Casualty Insurance agent to get specific information on what your flood insurance includes.

Who is Covered by Flood Insurance?

Flood insurance covers the policyholder, who may be an:

• individual,

• corporation,

• business owner,

• employer, employee,

• homeowner, or

• tenant (Residential or Commercial) who rents the insured property.

What Types of Items Does Flood Insurance Cover?

This depends on the type of flood insurance coverage you opt for. If you have building coverage under your flood insurance policy, it will cover structural damages to the building. So in the event of a flood where the floor in your insured building is badly damaged, your insurance company will bear the cost of replacement or repair. If you pay for contents coverage, your insurance policy will cover damages caused by flood to your personal belongings and electrical appliances in your home like microwave ovens, dryers, washers, dishwashers, etc.

Does Flood Insurance Cover - TX FAQ

Does Flood Insurance Cover Basements?

Yes, flood insurance covers basements. However, basement coverage is limited and will only cover items specifically listed in your flood insurance coverage policy, such as specific building items in a basement and cleanup expenses. Note that covered items must be connected to a power source, where applicable, and/or installed in their functioning location. Some covered items are:

• electrical outlets and switches

• central air conditioners

• sump pumps, heat pumps, and well water tanks and pumps

• fuel tanks and the fuel in them dumbwaiters

• elevators, and related equipment.

Cleanup expenses can include the cost of:

• pumping out trapped floodwater

• structural drying of salvageable interior foundation elements

• removing spent cleaning solutions

• treating for mold and mildew

Some typical exclusions of basement coverage under flood insurance are personal properties (like couches or electronic gadgets), basement improvements, generators, etc. If you are unsure of what your basement coverage specifically excludes or includes, check your coverage policy or contact your insurance agent.

Be sure to document the manufacturer, model, serial number, and capacity of building equipment, such as central air conditioning units, furnaces, and appliances (including, washers, dryers, and freezers in a basement). This is because you will be required to provide this information during the claims process if a flood occurs.

Does Flood Insurance Cover Burst Pipes?

No. Flood insurance does not cover burst pipes as it only covers damages caused by natural flooding. Instead, homeowners insurance covers sudden and accidental burst pipes, such as a frozen pipe that bursts, but not if you failed to keep your home adequately heated.

Does Flood Insurance Cover Rain Damage?

Flood insurance covers only certain types of rain damage. For example, when there is heavy rainfall that causes a nearby river to overflow its banks and damage your home, your flood insurance will cover the resulting damage. However, if during a storm, your roof or window is accidentally broken, thereby causing your home to be flooded with water, your flood insurance would not cover the damage. In such a case, you can file a claim to your homeowners insurance provider.

Does Flood Insurance Cover Foundation Damage?

Yes. Flood insurance covers foundation damage if the damage is caused by a flood. Other causes of foundation damage caused by insect and pest damage, or earthquakes are covered by pest control insurance and earthquake insurance, respectively.

Does Flood Insurance Cover Sewer Backup?

Flood insurance only covers sewer backup if the sewer backup is directly caused by flooding. However, if your septic tank backs up, causing flooding in your house, only sewer backup insurance can cover the damage incurred.

Does Flood Insurance Cover Mold?

Yes. Flood insurance covers mold caused by flooding.

Does Flood Insurance Cover Contents?

Yes. Flood insurance covers the contents of your home or commercial building, including your personal belongings, if you purchase contents coverage under your flood insurance policy and if the coverage is within the limits of your policy.

What is not Covered by Flood Insurance?

Basically, flood insurance does not cover damages that are not caused by flood, such as bathtub overflow, water damage to walls, pipe leakage, etc.

What Does Flood Insurance Typically Exclude?

Flood insurance has some exclusions and items. The National Flood Insurance Program (NFIP) highlights the following kinds of damages that are not covered by flood insurance:

• Damages caused by moisture, mold, or mildew that could have been avoided by the property owner or which is not caused by flooding

• Damages that occur due to earth movement, regardless of whether the earth movement was caused by flood

• Temporary or permanent loss of use or access to the insured property

• Additional living expenses, such as the cost of getting temporary accommodation while the building is being repaired or is unable to be occupied

• Financial losses caused by business interruption

• Most automotive vehicles and their parts

• Property and belongings outside of an insured building, such as swimming pools, detached garages, septic systems, walks, decks, patios, trees, plants, wells, fences, seawalls, and hot tubs

• Currency, precious metals, and valuable papers, such as stock certificates

Is There a Waiting Period for Flood Insurance in Texas?

Yes, there is usually a 30-day waiting period before a flood insurance policy coverage begins. However, the waiting period may be waived if you initially purchased flood insurance while applying for, modifying, or renewing a loan for your property. In this case, your flood insurance policy will become effective when the loan is closed. The waiting period may also be waived if you live in an area newly included on the NFIP’s flood map change during the one-year period following the adoption of a revised Flood Insurance Rate Map for a community. The waiting period, in this case, is only one day. However, be sure to review your options with your insurance agent promptly.

Who Can Get Flood Insurance in Texas?

Anyone can get flood insurance in Texas, particularly if you stay in a flood zone:

• Homeowner

• Home renter

• Commercial property owner

• Commercial property tenant.

Consult with an NFIP-licensed Texas Property and Casualty Insurance agent to assess your flood insurance needs.

Who Qualifies for Flood Insurance?

Flood insurance is available to anyone living in any of the 23,000 participating NFIP communities, although it is also available to persons who stay in low-risk areas. Homes and businesses situated in high-risk flood areas with mortgages and loans from government-backed lenders are required to have flood insurance. In addition, property owners, whether private or business, and tenants are qualified to get flood insurance.

Who Needs Flood Insurance?

Everyone needs flood insurance, but the need is greater for persons who stay in flood zones in Texas, where the residents have previously received federal disaster assistance and grants from the Federal Emergency Management Agency (FEMA). In addition, persons who have received low-interest disaster loans from the United States Small Business Administration (SBA) are also required to get flood insurance to be considered for any future federal disaster aid.

Who Should Get Flood Insurance?

Flood insurance may be necessary for persons who live inside or outside the flood-zone area. If you own a property in the vicinity of a flood zone, you should consider getting flood insurance because, with it, you are confident that you do not have to pay out of your pocket in the event of a flood. If you have further questions about whether you should get flood insurance, reach out to an NFIP-licensed Texas Property and Casualty Insurance agent to evaluate your flood insurance needs.