How Much Is Flood Insurance in Texas? [Plan Accordingly]

What factors affect the average flood insurance cost in Texas?

Want to know the average cost of flood insurance in Texas? Luckily, you can easily determine “How much is flood insurance?” whether in Houston or Galveston, with a Risk Rating of 2.0.

Risk Rating 2.0 is a system – introduced by the Federal Emergency Management Agency (FEMA) – to help you calculate your property's flood insurance rate. This new system is designed to be more accurate and helps reduce the NFIP's (National Flood Insurance Program) debt. Unlike the previous system, Risk Rating 2.0 doesn't use flood maps. Instead, it calculates Texas flood insurance costs based on a property's specific risk factors, such as foundation type, elevation, and distance to water.

This updated pricing methodology provides fairer and more accurate premiums. However, your location will still play a big role in the final rate. Here are a few important factors that can affect your flood insurance cost in Texas:

Flood risk

Texas has various flood-prone areas that can impact your insurance premiums. Since Risk Rating 2.0 evaluates each property individually, you and your neighbor may have different flood risks.

Type of policy

The kind of policy you choose affects your rate. For instance, you can purchase a contents-only policy, a building-only policy, or a combined insurance policy. 

Coverage types and amounts

The level of coverage you buy also influences your costs. For example, a private policy that offers $1 million in building coverage will cost more than an NFIP policy with $250,000 in coverage.

Deductible

A higher deductible can help lower your premium. Typically, deductibles range from $1,000 to $10,000. However, it's crucial to note that higher deductibles mean you'll pay more out-of-pocket if you file a claim.

Age, design & structure of your home

Flood insurance companies also consider your home's age to determine rates. If your house is relatively old, insurers will charge you higher premiums. In addition, your home's design and materials affect the cost of flood insurance in Texas. 

Insurance company

If you plan to buy private flood insurance, it's best to get flood insurance quotes from multiple companies in Texas to find the best rate.

What does Texas flood insurance cover?

Flood insurance is crucial for Texans as standard homeowners insurance doesn't cover flood damage. With flood insurance, you get coverage for both your home (dwelling coverage) and your belongings (contents coverage). Dwelling coverage helps pay for repairs to your home, while contents coverage reimburses you for damaged personal items. You can select a building-only policy, a contents-only policy, or both.

Often, flood insurance policies come with a 30-day waiting period, which means coverage begins 30 days after you buy the policy. This prevents last-minute purchases when a hurricane or major storm is imminent.

Unlike home insurance, NFIP flood insurance doesn't include additional living expenses or loss of use coverage. If your home is damaged and you need to stay elsewhere temporarily, flood insurance won't cover extra costs such as hotel bills, restaurant meals, or pet boarding – expenses that a standard home insurance policy would cover.

Dwelling coverage

Also called building coverage, dwelling coverage pays to repair or rebuild your home if it's damaged by a flood. 

For example, if a flood ruins your water heater or electrical system, this coverage policy would cover the costs of repair or replacement. 

NFIP flood insurance has a $250,000 cap on dwelling coverage. If required, you can buy higher limits from private flood insurance providers.

Contents coverage

Contents coverage – also called personal property coverage – pays to repair or replace your belongings if they're damaged in a flood. This includes items like clothing, furniture, and appliances. The NFIP caps content coverage at $100,000, but private flood insurers may offer higher coverage limits. 

Unlike homeowners insurance deductibles, which apply to your entire home insurance policy, contents coverage is optional and must be bought separately.

What does flood insurance exclude?

Although flood insurance provides crucial coverage to Texas residents outside their home insurance, it usually doesn't cover specific circumstances or objects. 

Here are some common exclusions under NFIP flood insurance:

• Damage from earth movements such as sinkholes or landslides, even if triggered by a flood. You'll typically require earthquake insurance to cover such damages. 
• Damage to basements or belongings stored there.
• Damage from sewer backups. Home insurance policies may cover sewer backups, but usually only if you have purchased additional coverage called a water backup endorsement.
• Damage to vehicles. Comprehensive auto insurance will generally cover flood-related vehicle damage.
• Damage to most detached structures, such as patios, fences, plants, decks, and walkways.
• Costs for temporary housing or moving.
• Lost income.

NFIP flood insurance vs. private flood insurance in Texas

In Texas, flood insurance is available through both the National Flood Insurance Program (NFIP) and private insurers. Each option has unique advantages, depending on your individual coverage needs.

NFIP flood insurance

One of the most common options is to purchase a policy through the National Flood Insurance Program (NFIP), a government-run program that provides flood insurance. It offers homeowners up to $250,000 in dwelling coverage and $100,000 for personal property.

However, NFIP insurance has limits. For instance, it only covers the main house and not any other property, such as a yard, pool, fence, or other detached structures damaged by flooding. It also won't cover valuables or home business financial losses.

NFIP flood insurance policy helps you reimburse losses based on actual cash value (ACV), which means depreciation affects your payout. The claim amount will depend on your home's age and condition at the time of the loss. 

To buy this insurance, find a participating carrier in Texas. Contact the insurer and ask about flood coverage. An agent will guide you through the process. Once you pay the premium in full — as is typical for flood policies — coverage begins after a 30-day waiting period.

Private flood insurance

Another option is to buy private flood insurance directly or through a standard home insurance provider. Some insurance providers offer flood insurance as a standalone policy, while others may add it as an endorsement to a homeowner's policy.

Private flood insurance may provide higher coverage limits than NFIP policies and can be more flexible with policy features. It may also offer replacement cost value (RCV) for your home and belongings. This means any damage would be covered at the replacement value based on current market rates. To buy private flood insurance, make sure to research insurance companies that offer this coverage. 

Remember, many private companies also sell NFIP policies, so not all flood insurance from private carriers is "private" insurance. For it to be considered a private policy, the insurer must underwrite the coverage.

NFIP vs. private flood insurance: which is better?

So, which flood insurance in Texas provides low cost and better coverage limits? NFIP or private flood insurance? 

Private flood insurance isn't bound by the same restrictions as government flood coverage, so it can offer options the NFIP doesn't. This includes covering temporary living expenses such as hotel stays, meals, and personal belongings stored in your basement. Also, private flood insurance often provides higher coverage limits for your home and belongings and can include policy enhancements like replacement cost coverage for personal property. This reduces out-of-pocket costs after a flood.

Another advantage of private flood insurance is its shorter waiting period, which means coverage starts sooner after approval. This insurance can be especially helpful during hurricane season when immediate coverage is needed. However, there is a potential downside: private flood insurance can be canceled or non-renewed if your home is deemed too high-risk, unlike NFIP, which generally guarantees coverage.

But if you are looking for the cheapest flood insurance in Texas, you may consider private flood insurance. In fact, a 2017 Milliman study found that 92% of single-family homes in Texas could benefit from lower premiums with private flood insurance.

Tips on how to get Texas flood insurance and prepare for potential damage

To get the most out of your flood insurance in Texas, consider these steps:

• Evaluate your risk: Consult FEMA's Flood Map Service Center to determine your flood risk and identify which type of insurance best suits your needs.
• Compare NFIP and private options: Check NFIP and private insurance quotes to find a policy that fits your budget and coverage needs. 
• Bundle policies: Some insurers offer bundle discounts if you combine flood insurance with other types, such as homeowners or catastrophe insurance.
• Consider a higher deductible: Opting for a higher deductible may reduce your premium, though it requires a larger out-of-pocket contribution in case of a claim.
• Implement flood prevention measures: Install flood barriers and landscape to direct water flow and elevate utilities to minimize risk. This may help Texans lower monthly or annual premiums.

Still have questions?

Curious to learn more about how much flood insurance costs in Texas? Here are some frequently asked questions:

Why did my flood insurance go up in Texas?

Flood insurance rates can increase due to changes in FEMA's Risk Rating 2.0, updated flood zone maps, or personal factors like your home's age and location. Increases may also reflect a rise in claims within your area.

How can I reduce the cost of flood insurance in Texas?

You can reduce flood insurance costs by elevating your home, installing flood-proofing measures, choosing a higher deductible, and potentially relocating to a lower-risk zone if feasible. Bundling with other types of insurance or seeking discounts through private insurers may also help.

What is the Texas flood law?

Texas has specific regulations regarding flood disclosure, requiring sellers to inform buyers about a property's flood history. However, there is no state mandate for flood insurance; it remains a lender requirement in high-risk zones.

What is the waiting period for flood insurance in Texas?

Typically, NFIP policies have a 30-day waiting period before coverage takes effect. Private insurers may offer shorter waiting periods, often around 10 to 14 days, so it's advisable to secure coverage well before any forecasted storm season.

Does car insurance cover flooding in Texas?

Standard car insurance policies don't cover flood damage. However, if you have comprehensive car insurance, it generally includes coverage for flood-related damage to your vehicle. Make sure to review your auto policy and add comprehensive coverage if necessary.