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Texas flood insurance

A playground outside of Austin that is flooded after a storm.
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Flooding in Texas is incredibly common. Every year, Texas gets hit with hurricanes and other major storms that can cause extensive flood damage. Although homeowners insurance does not cover flood damage, Texas homeowners could opt to purchase a standalone flood insurance policy for protection.

Why Texas homeowners need flood insurance

Over the last decade, Texas has seen some of the worst hurricanes in recent history. In 2017, Hurricane Harvey caused roughly $125 billion in damage as it slammed into the Gulf Coast. The storm dropped 50 inches of rainfall in some places and completely flooded one-third of Houston’s land area.

Some research has found that climate change is causing flooding in Texas to become more frequent and more devastating. The Washington Post reports that two individual studies determined that climate change increased the amount of rainfall after Hurricane Harvey by 20-35%.

Data from the Federal Emergency Management Agency (FEMA) shows that the risk of flooding is higher along the Texas coastline, in the southern region and the Dallas area. However, almost every part of Texas is somewhat susceptible to flooding, which means homeowners across the state should consider flood insurance. Knowing your flood risk could help you decide if flood insurance is right for you.

Cost of flood insurance in Texas

According to FEMA, the average flood insurance policy costs $700 per year, which provides policies through the National Flood Insurance Program (NFIP). However, your premium will depend on the flood risk in your area. Higher-risk areas have a higher risk of flood damage, and residents in those areas tend to pay for more coverage. Additionally, some private insurance companies offer flood insurance. A flood policy from a private insurer will likely cost a different amount than a policy underwritten by the government. And flood insurance isn’t just for homeowners; renters may want to consider flood insurance to gain coverage for their personal belongings.

Not every homeowner pays the same amount for their flood insurance. A variety of factors can impact your premium, like your home’s specific location, the value of your home and the value of your belongings inside the home, should you choose to insure them (you can buy a flood policy with just dwelling coverage). Depending on the state, a homeowner’s credit score and claims history might also affect their flood insurance rate. Not all states allow insurance companies to use your credit-based insurance score when calculating your rate.

When to purchase flood insurance

If you are thinking about getting flood insurance, being proactive is key. Most flood insurance policies have a 30-day waiting period, which means the coverage is not valid for one month after signing the contract, although there are a few exceptions. Additionally, some insurance carriers put a moratorium on purchasing flood insurance policies when a natural disaster is imminent. If you wait until a storm is on the way to buy insurance, you might find yourself unable to purchase a policy.

Insurance experts typically advise that Texas residents not wait until a storm is on the horizon to purchase flood insurance coverage. Storms are unpredictable and can hit at any time. Having a flood policy in place before a storm is coming is the safest way to prepare for the financial impact of flood damage.

How to purchase flood insurance in Texas

Purchasing flood insurance is a bit different from buying regular home insurance. The first thing to do when considering flood insurance is to determine where you can get quotes. There are two main options for getting flood insurance in Texas.

NFIP flood insurance

The most common option is to buy a policy through the National Flood Insurance Program (NFIP). The NFIP is a government-run insurance program that offers flood insurance. NFIP flood insurance can be written with dwelling coverage up to $250,000 and personal property coverage up to $100,000.

However, NFIP insurance does not cover everything. It does not cover any property besides the main home, so a yard, pool or fence destroyed by floodwater is not covered. It also does not cover valuables or home business financial losses.

With NFIP insurance, the insured is reimbursed for losses on the basis of actual cash value (ACV). That means the depreciation is factored into the claim payout. Depreciation will be determined by your home’s age and condition at the time of the loss.

To buy NFIP flood insurance, search for a participating provider in Texas. Contact the company and inquire about flood coverage, and an agent will walk through the process and explain what is and is not covered. Once the premium is paid — most flood policies must be paid in full upfront — coverage will take effect after the 30-day waiting period.

Private flood insurance

The other option is to buy private flood insurance from a standard insurance provider. Depending on the insurance company, flood insurance is available as a standalone policy or, occasionally, an endorsement on a homeowner’s insurance policy.

Private insurers may offer higher coverage limits than the NFIP, and there may be more flexibility with the policy features. Additionally, private flood insurance may offer replacement cost value (RCV) for your home and personal belongings, which means any damage is paid for at the replacement value.

Before deciding on private flood insurance, research what is required to qualify for coverage. For instance, homes located in very high-risk areas might not be eligible for private insurance. In that case, NFIP insurance might be a good option.

To get private flood insurance, research providers that offer this type of coverage in the area where you live. Keep in mind that many private insurance companies sell NFIP policies. Just because an insurance carrier sells flood insurance doesn’t mean it’s “private” insurance. To be considered a private policy, an insurer must underwrite the coverage themselves.

Frequently asked questions

How much does flood insurance cost?

The cost of flood insurance varies based on a few factors. The average cost of an NFIP policy is $700 per year. Private flood insurance may be more or less, depending on the company. However, factors like the home’s location, the age of the home and the applicant’s credit score and claims history can affect the rate, in states where applicable. Getting quotes from a few different carriers as well as the NFIP might help you find the lowest price for coverage.

Is flood insurance required?

Flood insurance is not legally required, but if you have a mortgage on your home and are in a high risk area, the mortgage lender will likely require it. In either situation, purchasing flood insurance can be a smart investment, especially for Texas homeowners.

Does flood insurance include loss of use coverage?

It depends. NFIP flood insurance does not include loss of use coverage, which pays for hotel, food and other associated costs if a home is damaged in a flood and the homeowner has to relocate temporarily. Private flood insurance policies may include loss of use coverage.

Written by
Elizabeth Rivelli
Insurance Contributor
Elizabeth Rivelli is a contributing insurance writer for Bankrate and has years of experience writing for insurance domains such as The Simple Dollar, and NextAdvisor, among others
Edited by
Insurance Editor