A recent report released by Neptune Flood has shed light on the growing issue of flood risk and insurance coverage gaps in Texas. The research reveals that over 2.1 million properties in the state are projected to face flood exposure in the next 30 years, with more than 200,000 properties expected to flood with near certainty.
Current Flood Risk Landscape
Data from the First Street Foundation indicates that 1.15 million properties in Texas face at least a 1% annual chance of flooding. The Texas Water Development Board (TWDB) projects that by 2050, population growth, ongoing development, and climate change will place 2.6 million more people and 740,000 new buildings into high flood risk zones. However, current FEMA flood maps identify only about 860,000 at-risk properties, highlighting significant gaps in flood risk mapping.
Insurance Coverage Challenges
Nearly half of the National Flood Insurance Program (NFIP) policies in Texas cover Pre-FIRM homes, which are older properties considered more vulnerable to flood damage. More than half of NFIP claims in Texas since 2005 have occurred outside FEMA-designated high-risk zones. Texas ranks second in the nation for NFIP claims, with over 150,000 claims totaling $11.6 billion in payouts over the past decade. Harris County alone accounts for nearly half of these payouts, yet more than 78% of homes in the county remain uninsured.
Economic Implications
The TWDB has identified $54.5 billion in flood risk mitigation needs, but only $10.6 billion in funding has been allocated. Statewide, flood insurance covers just 7% of residential properties. Coverage rates in major inland metropolitan areas, including Dallas, Denton, and Bexar counties, remain below 1%, despite repeated flooding events. Even in FEMA-designated high-risk zones, only 28% of residential buildings have flood insurance.
Impact of Recent Policy Changes
Since FEMA introduced its Risk Rating 2.0 pricing model in 2021, average flood insurance premiums in Texas have risen 35%, while the number of insured buildings has dropped by 30%. As rates transition to full-risk pricing, affordability concerns are increasing, with premiums in some counties consuming 4% to 5% of household income.
Expert Insights and Recommendations
“Texas faces a clear and growing flood risk, yet millions of properties remain without adequate insurance coverage,” said Matt Duffy, president of Neptune Flood. “This report underscores the scale of the challenge and the need to improve both awareness and access to flood protection.” The report recommends updating flood maps, addressing development trends, adjusting policies, and expanding private flood insurance options through public-private collaboration to strengthen resilience.
Recent Disaster Context
The report comes as property, auto, and business insurers continue responding to tornado damage across several states. According to the Insurance Information Institute (Triple-I), thousands of homes and businesses have been damaged by recent tornadoes. Insurers paid nearly $54 billion in severe convective storm claims in 2024, which include tornado-related losses. “Property/casualty insurers are the nation’s financial first responders,” said Sean Kevelighan, CEO of Triple-I. “Many have rapid response teams on the ground in hardest-hit areas to assist policyholders with claims and recovery.”
