Many Texas residents and business owners impacted by July’s destructive storms were caught off guard by a critical gap: standard homeowners insurance does not cover flood damage—leaving thousands unprotected amid widespread flooding, according to insurance industry experts.
While standard homeowners policies typically cover damage from fires, tornadoes, hail, and wind, **flood damage is universally excluded**, insurers confirm. This distinction has proven financially devastating for many storm victims who assumed their existing coverage would address flood-related losses, such as water damage to structures, furniture, or personal belongings.
Flooding is a recurring threat in Texas, yet participation in the federal National Flood Insurance Program (NFIP)**—the primary source of flood coverage for most homeowners—remains minimal. Statewide, only 7% of homeowners carry NFIP policies.
The gap is even starker in Central Texas counties hit hardest by July 2–18 flooding. In Burnet, Guadalupe, Kerr, Kimble, McCulloch, Menard, San Saba, Tom Green, Travis, and Williamson counties—home to over 170,000 residential structures—more than 90% of homes lack NFIP coverage, according to FEMA data. This means the vast majority of residents affected by last month’s floods have no financial safety net for flood-related repairs.
Flood damage can strike unexpectedly, even in areas not designated as “high-risk.” Experts note that just 1 inch of floodwater can cause up to $25,000 in damage to a typical home—costs that must be covered out-of-pocket without flood insurance.
Participation in the NFIP also makes homeowners eligible for federal disaster assistance after events like July’s floods—support that is not available to those without coverage.
A critical note: NFIP policies have a 30-day waiting period before they take effect—meaning coverage will not apply to immediate or ongoing storm damage. Insurers urge anyone in flood-prone areas to act promptly to avoid gaps in protection.
The NFIP currently works with over 50 private insurance companies to sell and manage policies, making coverage accessible in most Texas communities that participate in the program.
“July’s storms are a stark reminder that flood risk is everyone’s risk—regardless of where you live,” said a spokesperson for the Texas Department of Insurance. “The biggest mistake homeowners make is assuming their standard policy covers floods. Taking the time to get flood insurance now can save thousands in the long run.”
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