Damage from Texas Floods Could Top $1 Billion

Now that floodwaters in Central and South Texas have begun to recede, officials are anticipating hundreds of millions of dollars in damages to residential and commercial property at a time when the state’s homeowners and commercial property markets are already reeling from an epidemic of mold and water claims.

According to Jerry Johns, president of the Southwest Insurance Information Service, once all claims have been submitted, costs from flood damage could pass the $1 billion mark: “We believe that once all is said and done, and claims from the National Flood Insurance Program and the private sector, the total will come to some place between $750 million and $1 billion.”

The Austin American Statesman reports that Gov. Rick Perry also anticipates costs of up to $1 billion. According to the governor, 3.6 million people in Texas were affected by the floods, which occurred in late June and early July.

Thirteen counties were initially declared federal disaster areas by the Federal Emergency Management Agency (FEMA): Atascosa, Bandera, Bexar, Blanco, Comal, Gillespie, Guadalupe, Hays, Kendall, Kerr, Medina, Travis and Uvalde. FEMA then added 11 more counties—Brown, Caldwell, Eastland, Frio, Goliad, Gonzales, Karnes, La Salle, Real, Taylor and Wilson—to the list last week. Perry has also requested the designation for 17 additional counties, which would qualify affected residents and businesses for federal aid; the remaining six of those 17 are still under consideration by FEMA.

Meanwhile, many Central and South Texas homeowners affected by recent floods are finding that standard homeowners policies do not cover flood damage; such damage is instead covered through a separate federal program, of which many were unaware. While banks require property owners in flood zones
to buy flood insurance, they don’t often verify whether coverage is active. Flood insurance usually costs around $386 for $138,850 in coverage.

In Travis County, 6,251 flood policies are active, compared to 213,371 residential property policies. There are 53 flood insurance policies in Blanco, while in Hays, there are 770 policies out of 21,314. In Williamson, there are 925 flood insurance policies.

According to FEMA spokesman Mark Stevens, there are 438,625 flood insurance policies in force in Texas—second only to Florida—but that number is expected to grow in light of the current disaster.

Responding to the crisis, the Texas Department of Insurance has opened two disaster recovery centers in San Antonio, and one each in Seguin, Kerrville, Bandera, Canyon Lake and New Braunfels.

On July 3, Gov. Perry wrote to President Bush requesting individual assistance and for Public Assistance, a type of FEMA funding which includes money for infrastructure repair. If this funding is approved, the federal government would pay for 75 percent of infrastructure repairs, while local governments would cover the remaining 25 percent. After floods ravaged the state in 1998, the federal government gave the state $33 million for infrastructure repairs; in the wake of Tropical Storm Allison last year, FEMA approved $380 million for such repairs.

San Antonio and Bexar County have estimated a total of at least $7.2 million in infrastructure damage, which alone accounts for one third of the $20 million statewide benchmark set for FEMA assistance to the entire state.

Complicating the situation considerably is the fact that the Red Cross has received less than $7,000 in donations for recovery efforts since July 2; nationwide, the total is expected to be less than $300,000. The Red Cross expects the Texas recovery effort to cost between $10 and $12 million. (Recovery efforts after the 1998 floods cost $10.8 million, $4 million of which was donated.)

Topics Texas Flood