Flood insurance is a constant topic along the Texas coast, especially in waterfront communities like League City, Seabrook, Dickinson, Nassau Bay, and Clear Lake Shores. If you live here, two things are worth understanding: how your premium is now calculated, and why a standard homeowners policy will not cover you.
Flood damage is not covered by your homeowners policy
This surprises people every hurricane season. Flood is excluded from standard home and renters policies and requires a separate policy, whether through the National Flood Insurance Program or a private carrier. If your home is in a Special Flood Hazard Area and you have a federally backed mortgage, coverage is required. If you are outside one, it is optional, and plenty of Bay Area homes that flood are not in a mapped high-risk zone.
How flood premiums are priced today
FEMA changed its entire rating methodology with Risk Rating 2.0, fully implemented in April 2023. The old system priced your policy largely on which flood zone you were in and your elevation relative to the base flood elevation on the map. That is no longer how it works.
Today your premium is based on your specific property rather than a zone: distance to a flooding source, the types of flooding your property faces including river overflow, storm surge, and heavy rainfall, the elevation of the structure itself, the cost to rebuild, and the foundation type. Two homes on the same street in the same zone can now be priced quite differently, which is a more accurate reflection of reality here.
Flood zones still matter, just not for pricing. They determine whether coverage is mandatory with a federally backed mortgage.
What this means if your premium is rising
Policies that were previously subsidized or grandfathered are transitioning toward their full-risk premium over time, and annual increases are generally capped at 18 percent until that rate is reached. If your premium has been climbing each year, that transition is the likely reason.
There are also ways to bring it down. Elevation certificates, certain mitigation improvements, and your community’s participation in the Community Rating System can all reduce what you pay, with CRS discounts ranging from 5 to 45 percent depending on the community’s classification.
Let us look at your specific situation
Paula Smith Insurance knows the National Flood Insurance Program and the private flood market, and we are glad to be a resource while you sort out your options. We can review what you currently have, explain what is driving your rate, and look at whether mitigation credits or a private carrier would serve you better.
Email Paula@PaulaSmithInsurance.com, call (281) 488-8880, or request a free flood insurance quote.
We also write homeowners and windstorm coverage, auto and motorcycle, boats and RVs, plus life and business insurance. Our blog has more on coastal coverage.