Though Harvey has been downgraded to a tropical storm, the weather system that could bring as many as 40 inches of rain is expected to devastate southeast Texas with widespread flooding.
But despite a history of damaging waters in the Lone Star state, only a small percentage of Texans carry flood insurance, coverage offered almost exclusively by the federal government and sold separately from standard homeowner policies.
The figures vary. Mark Hanna, a spokesman for the Insurance Council of Texas, estimates only about 1 in 5 Texas homeowners has flood protection.
In 2015, the federal National Flood Insurance Program — housed under the Federal Emergency Management Agency — covered about 588,000 flood insurance policies in Texas, according to the Insurance Information Institute.
In a snapshot of Texas’ high-risk coastal counties, Harris County had the highest number of NFIP policies — 240,350 as of August 2016 — but had about 1.6 million housing units at that time, the institute reports.
“People don’t think it’s going to happen to them,” said Loretta Worters, spokeswoman for the III. Many people don’t want to spend the money, she continued, “but for a little more money a month, you can safeguard your home.”
In a 2016 national poll, the institute found that just 12 percent of homeowners carried flood insurance — with the rate slightly higher, about 14 percent, in the South, Worters said.
Hanna noted that many of those homeowners are required to maintain the coverage by their mortgage lender if their property sits in a designated flood plain. Some private insurers offer coverage beyond what the federal policy covers, though NFIP is responsible for the majority of policies.
Harvey’s expected flood damage comes as Congress faces a deadline of the end of September to renew the federal flood program, which as a result of devastating storms like Hurricanes Katrina and Sandy is nearly $25 billion in debt.
U.S. Rep. Jeb Hensarling, R-Dallas, who leads the House Financial Services Committee, is overseeing the effort, but lawmakers so far have failed to reach consensus on how to make the program solvent without making policies unaffordable.
Hanna said that even with the NFIP’s uncertain future, people with flood insurance should be reimbursed for Harvey-related damage.
Those without coverage who experience flooding could pursue a low- or no- interest loan through the federal government to rebuild, or turn to groups including the American Red Cross, he said.
Fast facts about previous Texas hurricanes and insurance coverage:
- Flooding is the No. 1 natural disaster in the U.S., according to FEMA, with flood insurance claims averaging nearly $2 billion annually between 2006 and 2015.
- Hurricane Rita, which hammered Texas in 2005, caused nearly $2 billion in insured property losses in the state. And Hurricane Ike, in 2008, caused nearly $10 billion in property damage in Texas — nearly $11 billion in 2015 dollars. Those figures do not include damage from flooding.
- The insured value of property in coastal Texas totaled $1.2 trillion in 2013 — about a fourth of the state’s total insured property — according to an analysis by AIR Worldwide.
- More than a third of NFIP policies are in Florida. Texas accounts for 12 percent of policies, according to a report by the Washington-based Resources for the Future, a nonpartisan research organization.
- National Flood Insurance Program residential policies start at $112 a year, but increase according to flood risk.
- The policy covers up to $250,000 for the structure of a home and $100,000 in personal property, though some private insurers provide coverage beyond those limits. People can only buy the insurance if their community participates in the NFIP program.
- It’s probably too late to buy flood insurance for the 2017 hurricane season. It takes 30 days for a flood insurance policy to take effect, and the program could sunset — unless lawmakers take action — by end of September.
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Texas Licensed Public Insurance Adjuster, Certified Property Insurance Appraiser & Umpire (CPAU), OSHA 10 Certified & Former National Flood Insurance Adjuster that has handled insurance claims from all sides of the fence since 2003.