Introduction to the Texas Floods
A new report has revealed the severity of the insurance crisis during the July 4th floods in Central Texas. The floods had a devastating impact on many people who lost their homes and businesses. According to the report by the Insurance Fairness Project, only 3% of homes that were damaged had federal flood insurance, known as the National Flood Insurance Program.
Flood Damage Impact on Central Texas
The report highlights the level of devastation caused by the floods. Entire neighborhoods and business districts in Central Texas were submerged in water when the Guadalupe River rose 26 feet. The floods caused $22 billion in economic damage. Despite the fact that the Guadalupe River is known for flash floods, the report found that only 3% of 3,000 homes in FEMA-designated flood zones in Kerr County had federal flood insurance. Additionally, 3,000 businesses were damaged or destroyed, including restaurants, stores, and RV parks, and many will not be able to reopen.
Reasons for Lack of Federal Flood Insurance
The report points to several reasons why so few homeowners had federal flood insurance. Climate risk, inflation, and worsening weather disasters have been driving up the cost of insurance. The average Texan pays $4,000 a year for homeowners insurance, $1,700 more than the national average. Last year, four insurance companies left the Texas market, impacting 10,000 policyholders. Many people still do not know that homeowners’ insurance does not include flood insurance, and if a homeowner is not required to have flood insurance, they often opt not to purchase it.
Impact of the Insurance Crisis
The impact of the insurance crisis was catastrophic, and it will take years, if not decades, for people to recover. The report also says that FEMA’s response to this flood was riddled with delays, disparities, and denials, especially in some of the hardest hit communities. 7,677 flood claims were filed across 10 affected counties, and six weeks after the floods, fewer than half had been approved. At that six-week point, Kerr County, which suffered the most severe damage, had the lowest approval rate at 18%, while neighboring Tom Green County had 66% approved.
Effects on the Community
The result of the insurance crisis is that people in need will lean on state and local resources for help. If you have a business or a home and all of a sudden you’re out of your home, you’re going to seek more social services, which means more demand for state and local resources. This will put a strain on the community and will require a long-term effort to recover.
Response from FEMA
We reached out to FEMA for its response to this report. A spokesperson tells us they’re looking into the report. We’ll update this article when we receive its response.
Conclusion
In conclusion, the insurance crisis made the July 4th floods in Central Texas even worse for many people who lost their homes and businesses. The lack of federal flood insurance and the high cost of insurance have left many people vulnerable to financial losses. The report highlights the need for awareness and education about the importance of flood insurance and the need for a more effective response from FEMA. It is essential for homeowners and businesses to understand the risks and take necessary steps to protect themselves from future disasters.
