Should Texas Residents buy Flood Insurance?

Live in Texas and wonder if you should buy flood insurance? Well think about this statistic and you are bound to have your answer. Texas is near the top of the chart when it comes to damage created by weather-related activities. The greatest portion of the damage is directly attributable to floods. And if you are still not sure whether you require flood insurance, you may not have any choice in the matter if your home is mortgaged.

Depending on the amount of a mortgage, especially in instances where the bank or mortgage company owns the majority dollar value of the home, it may require flood insurance as a condition of the loan. Further, if the home is in an area with a propensity to flood either known by historical data or environmental changes to the area, the bank will indeed require insurance.

Many areas are designated as floodplains or flood zones. The NFIP and FEMA keep maps which indicate areas where flooding is probable. Banks and mortgage companies will review these maps to determine whether your home is located in or near the area and will make a decision. Disagreeing with their decision will hardly help you, as you will walk away with no loan. For people who have existing loans and receive a notice to purchase flood insurance, it will be difficult, if not impossible to fight. As long as the bank carries the mortgage, it will make the decisions under which you will keep that mortgage. Further, if the maps showing floodplains have changed and your property is now affected, their decision may be well founded and indeed prudent.

In addition, if you live in an area that has previously flooded and you subsequently apply and receive assistance, then flood insurance is mandatory for as long as you live in the same home. If you choose not to buy flood insurance after having been helped, then you will never be able to receive assistance again. This actually applies to all states and not just Texas.

And if you are not forced or required to buy flood insurance as a condition of your mortgage or previous assistance status, then the questions remains "should you buy insurance of your own free will?" We have compiled a few facts to help you make that decision.
 

  • Texas holds the highest incidence of flash flood deaths in the nation. Although flood insurance will not prevent deaths, the fact that Texas has so many deaths from flash flooding shows that flooding is a serious problem. Thus, flood insurance is a good idea for residents of Texas.
  • From 1978 through 2001, Texas had the highest payouts totaling nearly two and a half billion dollars.
  • The top ten areas of Texas that consistently require flood assistance are Houston, Harris County, Montgomery County, Galveston County, Friendswood, Pasadena, Guadalupe, Brazoria, Pearland and Beaumont.
  • Flooding of July 2007 damaged or destroyed almost one thousand homes and very few of the homeowners had flood insurance.
  • During the course of a thirty-year mortgage, a home has a significantly higher chance of being damaged by flood than fire.
  • More claims are made in low-lying areas meaning that everyone in any zone level is affected by flood, not just those living in high-risk areas. High-risk being right on the banks or shores of the body of water.

Based on all the statistics and past experience, buying flood insurance is a necessity and not a choice when living in Texas.