Triple-I, Moody’s highlight underutilization of flood insurance amid Texas floods
(The Insurer) - The Insurance Information Institute (Triple-I) and Moody’s have highlighted significant gaps in flood insurance coverage following the devastating July 4 Texas floods, with Kerr County, the hardest-hit area, reporting an average flood insurance penetration rate of just 2.5%, well below the national average of 6%, according to National Flood Insurance Program data.
“Floods are the most common and costly natural disasters in the United States, yet flood insurance remains one of the most underutilized forms of protection,” Triple-I said.
The catastrophic flooding in Texas claimed more than 100 lives and caused estimated damages in the billions of dollars. The event set a new flood record for the region, surpassing the previous high of 36.60 feet set in 1932.
Flood insurance is typically purchased as a separate policy, most often through the NFIP, which is managed by the Federal Emergency Management Agency.
Despite Texas being among the most flood-prone states due to its exposure to hurricanes, tropical systems, and severe storms, uptake remains low. Triple-I stressed that rebuilding efforts will require a sustained focus on strengthening community resilience.
“While insurance is a vital first step, resilience also demands attention to how and where homes and developments are built, so tragedies like this can be better predicted—and prevented,” Triple-I stated.
New commentary from Moody’s noted that over 23 million Americans live behind levees, which collectively protect more than $2 trillion in property. However, the average levee in the U.S. is over 60 years old, often predating modern engineering standards and built for less intense weather and lower population densities.
Moody’s highlighted that measures such as elevating first floors above base flood elevation, using flood-resistant materials, and reinforcing structures can significantly reduce vulnerability in flood-prone areas.
The company noted that these strategies are especially critical as aging infrastructure faces the increasing threat of being overtopped or breached during severe flood events.
