Why you need to read this for Flood insurance Texas
Flood Insurance Texas
Does my homeowner’s insurance cover flooding?
Do I need flood insurance in Texas?
What are my flood insurance options in Texas?
TEXAS NFIP flood insurance
Texas private flood insurance market
How much does flood insurance cost in Texas?
How to save money on Flood Insurance in TEXAS
Five things you need to know about flood insurance in
Texas Flood Insurance calculator
Cost of flood insurance in TEXAS? (click on your city to find the average)
This blog will answer common questions that we get about flood insurance in Texas, we will also share some statistics and links if you get really into the research for Texas flood insurance, This is our attempt to pull all the information you could be interested in specifically the cost of TX flood insurance, we will also review the difference in Texas’ NFIP policies and Texas’ Private flood Insurance Market and finish up with Texas’ Lloyd of London Flood Insurance companies. We would like to hear your thoughts so please share, comment, ask questions or if you want us to explore a topic further let us know. To keep it easy we have some quick jumps to sections that you might be interested in. Enjoy. Your flood Nerd.
A typical Texas homeowner’s policy is written through Farmers, State Farm, Allstate, and Progressive, for instance, excludes flooding as something that will be covered under their homeowner’s policy.
In most cases, the only way to get flood coverage is by purchasing a stand-alone flood insurance policy.
However, you should ask your homeowners agent if you can add an endorsement to your homeowner’s policy to cover flooding.
Yet, don’t be too surprised if the answer is NO.
It is important to have flood insurance coverage in Texas because our beloved lone star state has seen a fair share of flooding, and there is likely more coming.
We believe that most homeowners think about Flood insurance in Texas at some point, maybe before buying a home, or during the closing process.
However, many of us only think about it when a big storm is looming, or we have heard on the news that there is flooding forecasted or happening currently too close to our home.
If your home or business is in a flood zone, that is considered low flood risk area. Sadly, many homeowners decide to forgo purchasing coverage because they believe they are safe from flooding.
Some real estate agents and some insurance agents may even say you don’t need it.
I ask you to consider the facts: 20-percent of all flooding events across our nation come in areas that are considered low risk.
After our last few major storms (Hurricane Harvey), we saw flooding in these low-risk areas.
In 80 percent of these individuals, they had water in their homes or buildings and didn’t have flood insurance coverage.
In Harris County, nearly 135,000 homes were damaged. Three-fourths of these properties were considered low to moderate risk.
We hear often that people believe that the government will help, and this is true.
However, there are a few things that must align for you to get government assistance.
1 – The president of the United States must declare the flooding event a state of emergency. If this doesn’t happen, then there won’t be assistance.
2 – The average amount of assistance that homeowners get after a flood when they do not have flood coverage, is $5,000. The average cost of damage to one’s property after a flood is $38,000+. That $5K you get from the government? It comes in the form of a loan and you will need to pay it back.
Are you willing to gamble away your financial future by forgoing flood insurance coverage?
One more note on these low-risk flood zone maps.
Many of these maps are over 40-years old.
If the area has been developed, then there is likely more concrete, creating a barrier for land that previously, might have absorbed the massive downpour.
Because of all these factors, it is really difficult for property owners to know their true risk of flooding.
FEMA admits that their flood maps only give an idea for part of the risk.
Our recent storms are facts that it can rain anywhere within Texas, and you should consider getting flood coverage, so you are not uninsured when you need it most.
FEMA flood zone maps often take years to go into effect after the terrain was studied, this gives the impression that the area is “more up to date” then it really is.
FEMA’s National Flood Insurance Program (NFIP) and all federally backed lenders rely on these Texas flood insurance maps to assess risk, set premiums, and determine who is required to purchase flood insurance.
Bad information about an area’s flood risk can leave property owners under or uninsured.
How much is flood insurance in Texas?
There are many options available in Texas regarding flood insurance, but they basically fall into
two main categories.
1 – The National Flood Insurance Program (NFIP), also known as FEMA, which is the government option for flood insurance. The NFIP has enjoyed a 50-state monopoly on the flood insurance market.
2 – Not “private flood insurance” but NFIP Resellers. If you have Nationwide Flood Insurance, State Farm Flood Insurance, Progressive Flood Insurance, or any of the logos below then you are buying the NFIP flood policy that is just being resold through a government program. These companies are private companies but their flood insurance is not. Here is a list of the 70 companies that resell the NFIP policy.
There are alternatives to the NFIP or government insurance.
It is called Private flood insurance most notably Lloyds of London Flood insurance, however, there are other options available in Texas.
We shop all the options for your property in your region to ensure you are getting the best premium.
If you are ready to have us do the work for you, please click here.
Our shopping does include the NFIP because sometimes we find that with government subsidies you can get a much better premium.
Lloyds of London Flood Insurance Texas Market
Texas is fortunate to have many Lloyds of London flood insurance options.
Although many Lloyds flood insurance companies will have you assume that there is only one option, nothing could be further from the truth.
Lloyds of London has a rich history and is attributed to have invented the very first modern insurance model.
Unlike most of its competition, Lloyds of London is not really a company but rather a corporate body.
This structure works quite well since it has been around for over 330 years.
Lloyds operates under multiple financial backers that all pool their capital to spread the risk.
I have two blog posts that take a deep dive into Lloyds of London and what they mean to Texas’s flood insurance market.
If you are interested, the links are below.
Lloyds also insures the world for flood insurance, meaning they cover flooding events in India, Australia as well as much of Europe. You see the “game” of insurance is to spread your risk since Lloyds is worldwide.
My joke here is that Lloyds is banking on God’s promise that he won’t flood the entire world again, …..so they won’t have to pay out the whole world’s flood claim.
There are many factors that go into getting the cost of flood insurance for Texas.
If your home is in what is considered low-to-moderate risk, you can get a heavily subsidized policy though the government.
Texas flood insurance low-to Moderate Risk rate and cost.
This is Flood Zone X, which is not lender required flood zone.
This is usually identified as an X-flood zone.
Then we would suggest the government Preferred Risk Policy (PRP) which is a subsidized policy and has set flood insurance coverage limits (see the grid below):
Here a link if you want to really dig into this one.
Be ready for an eye chart because every option is public record and should be standardized accost whoever writes these policies.
The average cost for flood insurance in Texas with the maximum set limits in these Low-risk flood zone areas is $405 – $700 per year.
If your property is in higher-risk flood zone, it is usually identified with a Flood Zone AE.
Your lender will require you to have flood insurance.
The cost of flood insurance in Texas depends on many factors that are unique to the structure.
We are going to try to give you an idea for the most common homes we see in Texas with a slab on grade foundation.
We will look at the Texas cost of flood insurance for the NFIP maximum of $250,000 for the (building only) with NO CONTENTS and our recommended deductible of $5,000.
We will be rating this example on the NFIP, as well as on a few of our private flood insurance policies, specifically Lloyds flood insurance options in Texas.
Our example is in Abilene TX, but the premiums will be the same if in Dallas, El Paso, Austin, Houston, Fort Worth, Irving, Oklahoma City, TX and many other Texas flood zones.