Flooding is one of the most common and costly natural disasters in the United States. According to the National Oceanic and Atmospheric Administration (NOAA), Texas is one of the states most frequently hit by natural disasters—and it’s among the costliest. If you own a rental property in Texas—or plan to—understanding how flood insurance works and why it’s essential can protect your investment and help you recover faster when storms strike.
Why Flood Insurance Is Critical in Texas
The Texas Gulf Coast, home to major cities like Houston and Galveston, faces a constant threat from hurricanes and tropical storms. The storm surge from these weather systems can push massive amounts of seawater inland, causing catastrophic flooding far beyond the immediate coastline. Hurricane Harvey in 2017 is a prime example, causing widespread flooding that affected thousands of properties, many of which were outside designated high-risk flood zones.
Texas has geographic features like shallow soil and hilly terrain that make it especially vulnerable to different types of flooding. As a landlord, it’s crucial to understand the risks specific to your property's location. According to the Texas Water Development Board’s 2024 state flood plan, approximately one in every six Texans lives or works in known flood hazard areas.
It’s important to note that standard property insurance does not cover damage caused by flood sources like storm surges, overflowing rivers, or heavy rainfall. This is where flood insurance fills in the gap. Without it, you could face tens of thousands of dollars in out-of-pocket repair costs.
Types of Flood Insurance for Landlords
There are two categories of flood insurance available to landlords:
- National Flood Insurance Program (NFIP)
Administered by FEMA (Federal Emergency Management Agency), the NFIP provides building and landlord-owned contents coverage for rental properties.
- Private flood insurance
Private insurers in Texas offer alternatives to the policies provided under the NFIP, including higher coverage limits and optional add-ons such as loss of rent coverage.
What Flood Insurance Covers
A typical flood insurance policy for Texas landlords should cover items such as:
- Structural damage to the property, such as the foundation, subflooring, and ceilings.
- Built-in appliances and fixtures, such as cabinets, flooring, and wall ovens.
- Personal property that you have included within the unit, such as bedroom furniture for a furnished rental and freestanding appliances like washers and dryers.
What Flood Insurance Doesn’t Cover
Below are examples of what typically isn’t included in a standard flood insurance policy:
- A tenant’s belongings must be insured through their own renter’s insurance policy.
- Loss of rental income is not standard in flood insurance; however, you may be able to obtain coverage through an add-on or separate policy.
- Outdoor property features such as fences, hot tubs, and swimming pools.
Flood Zones and the Associated Risk
To determine whether your property requires flood insurance, start by consulting the FEMA flood map. If your building is located in a Special Flood Hazard Area (SFHA), flood insurance is typically required by lenders. However, even if you’re in a moderate- or low-risk area, it’s still wise to consider coverage—especially with changing weather patterns and the increasing frequency of flash flooding.
Actionable Steps for Texas Landlords
Preparation and risk management can make all the difference when it comes to protecting your investment if a flood occurs.
- If you do not have flood insurance, check FEMA’s flood map to learn your flood risk level. Next, reach out to the NFIP or a licensed agent to obtain a quote.
- Take photos of all structural components of your rental property, including the building’s interior and exterior. Having pre-flood images can help ensure a smoother claims process.
- Gather all property records (permits, blueprints, repair invoices, etc.) and store them in a safe place. It will save you from scrambling to locate paperwork and relying on memory during a stressful time.
- Review your insurance policy on an annual basis. Conditions change over time. If you have made any renovations, for example, or if weather events have increased in the surrounding areas, it may be time to increase your policy coverage.
The Bottom Line for Texas Landlords
Investing in flood insurance is one of the best ways to protect your property, your tenants, and your income from costly flood damage. Whether your rental is along the Gulf Coast, in Houston, Austin, or the Hill Country, understanding your flood risk and preparing in advance can make recovery faster and less expensive. By taking proactive steps, you can safeguard your investment and focus on finding the right tenants.
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