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Texas Flood Insurance: What You Need to Know Before Purchasing a Policy

Home with wet street

All About Flood Insurance Coverage in Texas

Where you live in Texas will have a big impact on your decision to purchase flood insurance.

However, whether you live in a high-risk area or not, you should always plan for the unexpected by purchasing this valuable piece of protection because even the most unlikely areas of our state can and do get hit with flooding, causing millions of dollars in damages annually.  In fact, according to The National Insurance Flood Program, more than 25% of all flooding damage occurs outside of high risk areas.

Flooding vs. Other Perils

It is important to note your chances of flooding are much greater than many other perils you would normally insure against such as fire and vandalism.  In fact, flood claims are the number one most common peril home owners and renters face on a national level.

Waiting till the last minute in an attempt to purchase flood insurance or failing to take action at all can devastate your finances if the worst occurs because home owner’s policies will NOT cover rising flood waters.  

Auto insurance can cover this peril assuming the automobile has comprehensive coverage. But, many people fail to realize home insurance companies in Texas do not cover flood, only water damage caused by bursting pipes or other appliance related malfunctions.

Flood Insurance Premiums

Flood insurance policies in Texas are federally standardized and sold with varying premiums depending on the area, or “zone”, in which you live.  For those living in or near the flood plain premiums can be quite expensive, going as high as $10,000 per year or more.

However, most home owners in Texas live in zones with much lower risks for flooding, which reduces premiums substantially.  In fact, the average Texan will pay a flat 450.00 annually for flood insurance assuming the property falls in a zone X, which has the lowest available premiums in Texas.

You can check with your insurance agent or broker to determine which zone you live in.  Additionally, you can visit FEMA to determine your zone at: https://msc.fema.gov/portal/home.

Flood Policy Coverages

Damage to Dwelling

Flood policies will cover damages to your home dwelling and other structures along with your personal property contained within the home or condo itself.  The NFIP standard policy covers your property dwelling and personal effects up to the replacement cost or actual cash value(AVC) for damages, or the policies’ limits, whichever is less. 

Your Home’s Structure

Your home’s structure is covered for flood damages up to 250,000. Structural coverage even extends to things like: water heaters, air conditioning systems, flooring, dry wall, debris removal, and clean up.  

Elevated homes will typically have limited amounts of coverage for things like basements, crawlspaces, and ground level enclosures, so check with your insurance broker about any restrictions in the policy.

Excess Coverage

If your property or personal belongings are of particularly high value, you can even purchase excess flood insurance that go well beyond the standard limits of a flood policy.  So, check with us regarding these excess flood policies if there is a concern.

Personal Belongings

Any personal belongings contained within your home would normally be covered under your home insurance or renters policy for most common perils accept for flooding.  Therefore, your standard flood policy will include ACV or replacement cost up to 100,000 dollars for your personal contents.

A lot of people will ask what constitutes my personal property?  And, my response is always this analogy: Take your home and flip it upside down. Whatever falls out is essentially your personal property.

In other words, for insurance purposes, your personal property is anything you own that is not permanently affixed to the structure of your home.  Things like clothes washers, televisions, dryers, toys, clothes, furniture, tools, computers, and the like would be covered for flooding damages up to the $100,000 limit under a standard flood policy.

It is important to note FEMA requires you to make every effort to protect your personal property from damages if moving the property to avoid water damage is possible.  For instance, if you have a two-story home, reasonable care should be taken to move as much personal property from down stairs to upstairs in order to mitigate damages caused by flooding. Failure to do so could result in denial or limitation to your claims, so make every effort to safeguard your belongings should that day ever come!

Business Flood Insurance

Businesses in Texas have the opportunity to purchase up to 500,000 dollars in property flood insurance coverage with the option to add on excess flood insurance for an additional premium.  Some restrictions and limitations can apply and it is important to discuss your options for small business insurance with your agent or broker.

30-Day Waiting Period

Another important consideration when purchasing flood insurance is the fact that policies do not take effect immediately.  There is a 30-day waiting period for policies to become effective. So, waiting until a named storm is right off the coast of Galveston will not work!  Insurance companies and FEMA have placed this provision in order to prevent people from waiting until a large storm is imminent in order to purchase this insurance.  

Also, important to note are premiums provisions with this insurance: premiums are due by the due date listed on the renewal notice. So, if premiums are received after this due date, the policies’ effective date would be changed and another 30-day waiting period would apply.  The only exception to this rule would be the purchase of a new home. Flood insurance can be added with the purchase of a home alongside the home owner’s insurance plan without a wait.

Your Flood Risk

While you might not live in an area normally prone to flooding, it is very important to carry it because there could be torrential rainfall from a named storm or hurricane.  Hurricane Harvey dumped over 50 inches of rain around the Houston area in less than 72 hours causing massive flooding and property damage in excess of 95 billion dollars.

Not only this but, changes in terrain over time can increase water run-off and your chances of flooding in urban and rural areas alike.  Some of these changes are caused by: wildfires, erosion, and building development.

IHS: Your Flood Insurance Resource

I H S Insurance Group is an independent insurance brokerage with over 50 years combined insurance experience in our office. Our experienced agents can assist you in selecting a flood insurance policy that’s right for you and your family.  Call us today to receive your no obligation flood quote.