Neptune Flood has released a report analyzing flood risk and insurance coverage gaps in Texas – shedding light on a massive issue facing the state.
The research projects that over 2.1 million properties will face flood exposure in the next 30 years, with more than 200,000 properties expected to flood with near certainty.
Data from the First Street Foundation showed that 1.15 million properties in Texas face at least a 1% annual chance of flooding. The Texas Water Development Board (TWDB) projected 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.
Meanwhile, current FEMA flood maps identified only about 860,000 at-risk properties, exposing gaps in flood risk mapping. 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. Additionally, 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, but more than 78% of homes in the county remain uninsured.
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.
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.
Matt Duffy, president of Neptune Flood, said: “Texas faces a clear and growing flood risk, yet millions of properties remain without adequate insurance coverage. This report underscores the scale of the challenge and the need to improve both awareness and access to flood protection.”
In connection with the findings, the report recommended updating flood maps, addressing development trends, adjusting policies, and expanding private flood insurance options through public-private collaboration to strengthen resilience.
The report comes as property, auto, and business insurers continue responding to tornado damage across several states. The Insurance Information Institute (Triple-I) reported thousands of homes and businesses damaged by recent tornadoes.
“Property/casualty insurers are the nation’s financial first responders and many have rapid response teams on the ground in hardest-hit areas to assist policyholders with claims and recovery,” said Sean Kevelighan, CEO of Triple-I. He added that contacting an insurance professional is a recommended first step for policyholders beginning recovery.
Damage caused by tornadoes is generally covered under standard homeowners’, renters’, condo, business insurance, and the comprehensive portion of auto policies. According to Triple-I, insurers paid nearly $54 billion in severe convective storm claims in 2024, which include tornado-related losses.
