Central Texas Flooding Exposes a National Coverage Crisis

Hurricane season has barely begun, yet flood-related losses are already dominating headlines. The devastating floods in Central Texas over the Fourth of July weekend have sparked new urgency across the insurance industry, with staggering loss estimates and warnings of what may still lie ahead.

According to Gallagher Re, natural catastrophes in the first half of 2025 have already led to at least $84 billion in insured losses. Meanwhile, Aon PLC has predicted that insured losses from recent flash flooding events across the U.S. could reach tens of millions of dollars, significantly adding to the total losses already incurred to date. The Central Texas flooding alone is projected by AccuWeather Inc. to cause between $18 and $22 billion in total damage and economic loss.

And this is just the beginning. With only three named storms so far in the 2025 hurricane season, we still have four months to go. Experts from MS Amlin warn that insured hurricane losses could increase by as much as 50% compared to previous years.

The Real Problem: Lack of Flood Insurance Coverage

Despite mounting risks, flood insurance coverage in the U.S. remains alarmingly low. Take the Central Texas flood as a case in point. A Cotality analysis revealed that of the 38,600 residential properties in the declared disaster area, only 14,000 had active flood insurance policies. That means 64% of potentially affected homeowners were left without coverage.

Why is this happening? The answer lies in a combination of regulatory limitations and public misunderstanding. Properties without mortgages aren’t subject to any insurance requirements, flood or otherwise. And for mortgaged properties, lenders typically only require flood insurance if the structure is in a FEMA-designated Special Flood Hazard Area (SFHA).

But as the Yale University study following the Texas floods showed, flooding extended up to 200 feet beyond the mapped 100-year floodplain. Many of the uninsured properties likely fell just outside the SFHA - areas still at risk but not legally mandated to carry coverage.

Dispelling the Myth of “Low Risk”

A dangerous myth persists that homes outside high-risk flood zones don’t need flood insurance. In reality, flooding has occurred in nearly every U.S. county over the past few decades. Yet only 4% of homeowners nationwide have flood insurance, according to FEMA.

As insurance professionals, we must change this narrative. It’s our responsibility to help clients understand their actual risk and guide them to make informed decisions before disaster strikes.

How AFR Insurance Services Can Help

At AFR Insurance Services, we make it easy for agents to assess flood risk and secure the right coverage for their clients:

• Accurate Flood Zone Determinations: With 30+ years of experience, we deliver precise property-level assessments using FEMA floodplain maps.
• Risk Evaluation: We help you explain flood exposure clearly to your clients—even in “low-risk” areas. Not all “low risk” properties are equal.
• Access to Private Flood Markets: Our growing network of private carriers allows you to source flexible, cost-effective coverage options beyond the NFIP.

Be Part of the Solution

The flood risk in the U.S. is growing and so is the opportunity for agents to lead. Help your clients stay protected.