I've started to compose my thoughts on catastrophic flooding events in The Hill Country multiple times. It never feels quite right. As a parent of a 12 year old daughter, I cannot imagine what the families have gone through over the last few days. From every corner I can view it, it is simply unbelievable.
I have had the great fortune to spend much time in the affected areas. Some of my favorite places to cast a fly rod in the state of Texas were obliterated in a blink of an eye. It just doesn't seem that it can be real.
If you have spent time in that area like myself, you know that the flash flood risk is always present on those creeks, streams, and rivers. The things that make them beautiful and perfect are also the same things that them a high-risk flood area.
While we all have questions about the how and why of what happened in South Central Texas over the weekend, I'm not a meteorologist. I'm also not God and can't explain how this was allowed.
But I do understand Texas Flood Insurance on a level that is a little deeper than most, and I also have had many folks ask me questions about how flood insurance policies work. So I thought I would provide some clarity on key flood coverage subjects.
Does Homeowners Insurance Cover Floods?
The biggest misconception that many Texas property owners have is that their home insurance will cover a flood event. Your typical homeowner's insurance policy does not cover water coming into your home from a rising source. That means if the source of water coming into your house is from a river, creek, stream, spring, drainage network, or other similar source, you need flood insurance to be covered.
It can be complicated when a massive storm rolls in as we saw with the Hill Country events of this weekend. If your windows or roof are damaged from the storm, and rain water gets into your house, you will most likely have coverage from homeowners insurance.
The other problem this weekend is that entire homes and buildings were pulled from their foundations. While this feels like your home policy should cover it, it goes back to the rising water phenomenon. If your home is damaged or destroyed by water that begins outside and enters your home from the ground, you will need to have a flood policy.
Waiting Periods & Flood Zones
Now that you understand the need for a flood insurance policy, most people want to get one right away. It is common for Texans to see a forecast and understand that they should act quickly before it is too late. I have some bad news if you are seeking building and contents coverage when a flood forecast has been issued.
Flood insurance policies typically come with at least a 15 day waiting period before they are effective. That means that if you buy it today, it won't actually offer coverage for a couple of weeks. The insurance companies do this because they recognize people will buy them for a few days and then cancel if they don't have damage or make a large claim if they do. They call that anti-selection in the business. That is the nature of people, so they do this to protect their bottom line.
Once your property's flood zone has been determined by the most recent flood maps, the amount of risk that your property is in can be adequately determined and a premium quote generated. You will pay the premium and wait out the up to 30-day waiting period for coverage to go into effect.
If you are working with an independent flood insurance agent, they can check with multiple companies to get the best pricing for that coverage. There are now multiple private insurance companies that are providing alternative coverage to the National Flood Insurance Program (NFIP). What is best for you will be determined by your zone determination, building coverage needed, and any optional coverage that you desire.
Private Carriers vs National Flood Insurance Program
Over the last few years, private flood insurance companies have expanded their coverage offerings to Texans. The National program that has been run by Federal Emergency Management Agency (FEMA) has proven to be less desirable in many instances due to limited coverage amounts for both property and personal belongings. NFIP policies also do not provide many of the optional coverages that private companies offer.
Many people debate the merits of both sides of this choice, and there is not a single right answer. If your home or property are in a special flood hazard area, it requires careful consideration of not just premium costs. You also have to evaluate the health of the insurance company providing you coverage for potential flood damage for your home. This is why a trusted advisor is heavily recommended to help you navigate map revisions and community rating systems.
Optional Flood Insurance Coverage
When people begin to look at the federally subsidized flood insurance available through the NFIP, they often realize that the coverage available for flood damages is often limited compared to what they will likely need in a major event. This is one way that the private flood insurance companies have differentiated themselves.
One of the key provisions available in private coverage is what is known as "Loss of Use". This is a provision that will pay for you to live somewhere else while your house is being put back together. For folks in the affected areas in the Hill Country where entire homes were swept away, this becomes wildly important.
The other items are expanded coverage for contents and property and have become more important as building costs have skyrocketed. If you are in an older home that could be out of compliance with today's building codes, there are things like Ordinance or Law coverage that can help as well.
Get A Flood Policy Built For Texas
The bottom line is working with an experienced flood professional with multiple options for flood coverage is your best bet. This is why we do what we do day in and day out. Our goal is to make sure that you understand your risk, your options, and help you make wise decisions.
The events in the Hill Country have made us all pause and pray for the families of those whose lives have been completely changed. We love the places that have seen their landscapes altered, but it pales in comparison to the grief we share with those families.
If you would like to re-evaluate your options for Flood Insurance or other kinds of coverage, our agents are here to help. Click the button below to get started.
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