Texas flood insurance: what homeowners should know

Do you need flood insurance in Texas?

According to the Texas Water Development Board, more than five million Texans live in areas that are at risk of flooding. Flooding can be caused by heavy rainfall, hurricanes and tropical cyclones. The state predicts the severity of flooding to increase as climate change worsens.

Higher global temperatures mean there’s more moisture in the air, which can increase the risk for extreme flooding events. Texas coastlines are also vulnerable to flooding as glaciers melt and sea levels rise. Researchers found that the Texas coastline loses about four inches every year, which can contribute to flooding.

Although you might expect flooding risks to be highest along the coastline, data from the Federal Emergency Management Agency (FEMA) shows that flooding is also quite possible in the central and southern areas of the state, including metro areas like the Dallas-Forth Worth area. To help you determine your area’s flood risk, you might check out the flood map tool available on FEMA’s website. Just enter your address to see flooding boundaries and risks.

Cost of flood insurance in Texas

As of September 2023, the average cost of flood insurance in Texas is $784 per year, according to FEMA. This is slightly lower than the national average cost of flood insurance, which is $800 per year.  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. For example, homeowners along the coast in Calhoun County pay an average of $1,029 per year for an NFIP flood insurance policy, while those in the more inland Bexar County pay just $668 per year.

These are just average rates from the NFIP, which is not the only choice for Texas flood insurance. There are also private flood insurance providers that offer coverage limits higher than the NFIP. Like with home and auto insurance, the higher flood coverage limits you choose, the more you will likely pay for your policy.

Not every homeowner pays the same amount for their flood insurance, regardless of whether you choose a private provider or the NFIP. 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). Beginning April 2023, FEMA’s Risk Rating 2.0 has been fully rolled out. Risk rating 2.0 is FEMA’s new system for assigning flood insurance rates based on a broader number of factors like flood frequency, flood type, property characteristics, new data sets and other factors that affect how much flood insurance in Texas is. Under RIsk Rating 2.0, you can generally expect your Texas flood insurance costs to increase each year.

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 does not activate until a month after signing the contract, although there are a few exceptions. The waiting period for a private flood insurance policy is usually shorter, around five to seven days. 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. 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 different from buying regular home insurance. The first thing to do when considering coverage is to determine where you can get flood insurance quotes in Texas. There are two main options for getting flood insurance in the Lone Star State.

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, fence or other detached structures 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 directly or through a partnership with a standard home 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 based on current market standards.

Before deciding on private flood insurance, research what is required to qualify for coverage. For instance, homes located in very high-risk areas, such as those prone to hurricanes, 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 offers 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