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Growing Flood Risks in Texas

Neptune Flood has recently published a research report focusing on the accelerating flood risk in Texas, accompanied by startling findings about rising underinsurance levels. With projections suggesting that over 2.1 million properties will face flood exposure in the next three decades, and more than 200,000 properties expected to face flooding with near certainty, the state is confronting a significant insurance gap. Immediate action is needed to address these alarming statistics and bolster the region's resilience against flooding.

Key Findings

The report uncovers several critical findings based on the data from reputable organizations such as the First Street Foundation and the Texas Water Development Board (TWDB).

• - Vast Number of Properties at Risk: Out of the 2.1 million properties at risk, roughly 1.15 million have at least a 1% annual chance of flooding, suggesting a high potential for disaster if proactive measures are not taken.
• - Projected Increases in Population and Development: By 2050, TWDB estimates that migration and climate effects will lead to an additional 2.6 million people and 740,000 new buildings in areas already identified as high-risk for flooding.
• - Mapping Inadequacies: The current FEMA maps highlight just 860,000 properties as at risk, indicating a significant gap in the mapping and assessment of the overall risk landscape.

Underinsurance Issues

A further examination of insurance coverage reveals that nearly 50% of existing National Flood Insurance Program (NFIP) policies are associated with older structures (Pre-FIRM homes) that are inherently at higher risk of flooding. Since 2005, more than half of NFIP claims in Texas have originated outside the FEMA-designated high-risk flood zones, which indicates a broad and pressing issue of underinsurance in areas that are not traditionally viewed as susceptible to flooding.

Economic Implications of Inaction

Texas ranks second in the nation for NFIP claims, with over 150,000 claims amounting to nearly $11.6 billion in payments realized over the last decade. Harris County alone is responsible for almost half of these payouts. Alarmingly, the vast majority of homes in the region remain uninsured, revealing a significant shortfall in coverage. While TWDB has outlined over $54.5 billion worth of flood risk reduction solutions, the available funding to implement these solutions stands at a mere $10.6 billion.

Coverage Gaps

The report points to a worrying trend: only 7% of residential properties statewide currently hold flood insurance. Major population centers like Dallas and Denton report coverage rates falling below 1%, despite experiencing repeated flood events. Even within FEMA-designated high-risk flood zones, only about 28% of residential buildings have sufficient insurance. Following the implementation of FEMA's new pricing model, Risk Rating 2.0, average flood insurance premiums have increased by 35%, while the number of covered structures has declined by 30%. As insurance rates align more closely with actual risk over the coming years, concerns surrounding affordability are intensifying; in some counties, premiums could consume 4-5% of household income.

A Call for Action

Matt Duffy, President of Neptune Flood, emphasizes, "Texas faces a clear and escalating flood risk, yet millions of properties remain without adequate insurance coverage." He continues to stress the necessity of enhanced flood protection access and awareness. As flood risk continues to escalate due to climate change and evolving development patterns, it is critical that homeowners, insurers, and policymakers collaboratively seek to address these gaps.

Texas stands at a pivotal moment. Outdated flood maps, rapid development, climate change effects, and dwindling insurance coverage have created a precarious scenario that demands immediate and coordinated action. This report aims to inform strategies toward strengthening protections against flood threats, addressing not just the data gaps but also the urgent need for improved insurance access and management.

By leveraging data-driven insights, improving policy initiatives, and fostering public-private partnerships, Texas can work toward a more resilient future against floods.

Click here to view the complete analysis.

About Neptune Flood

Founded as the largest private flood insurance provider in the U.S., Neptune Flood harnesses pioneering AI-driven underwriting and machine learning technologies to transform the flood insurance landscape. With operations spanning across 49 states and Washington D.C., and plans to launch in Alaska, Neptune is dedicated to addressing the flood insurance gap and expanding coverage accessibility across the nation.