Billions in Flood Insurance Liability at Stake from Central Texas Storms

Central Texas is mopping up after strong storms dumped more than a foot of rain in some areas and many homeowners likely will be hoping they have flood insurance in place to cover the damage.

The National Weather Service reported significant flooding in the Austin area – Hays, Travis and Williamson counties. Wimberley, a town in Hays County of about 2,600 residents, had received up to 14 inches of rain since Oct. 30, NWS meteorologist Steve Smart said.

The Insurance Council of Texas reported that according to the National Flood Insurance Program (NFIP), Travis County has 9,060 flood insurance policies in effect totaling $2 billion in liability. Hays County has 805 flood insurance policies with $203 million in liability. Williamson County has 1,804 flood insurance policies with $456 million in liability. These flood insurance policies take into account both homeowners and businesses.

Statistics provided by the Federal Emergency Management Administration that oversees the NFIP show a home has a 26 percent chance of being damaged by a flood during the course of a 30-year mortgage, compared to a 9 percent chance of fire, the ICT said.

According to the NFIP, Texas has more than its share of flood claims but homeowners pay the same amount as homeowners in other states that have fewer losses. The NFIP said premium rates for most properties – around 75 percent – are intended to fully reflect the risk of flooding, but in order to encourage participation in the program the remaining 25 percent are subsidized.

Emergency rescues were needed in the pre-dawn hours in rural Hays County. A helicopter plucked four people from trees near Buda, said Warren Hassinger, a spokesman for Austin-Travis County Emergency Medical Services.

As many as 3,000 people heeded evacuation requests in San Marcos, 30 miles south of Austin, where emergency personnel went door-to-door on Oct. 31 urging residents to leave before floodwaters from the Blanco River reached the San Marcos River, police Chief Howard Williams said.

Congress had authorized the NFIP to begin the process of updating its flood maps and increase rates that would be actuarially justified. The announced rate increases across the country especially in areas along the coast have lawmakers looking at the possibility of postponing the increases for four years, according to the ICT.

Sources: Associated Press, Insurance Council of Texas