Guy Carpenter: Most flood impacted Texas counties have “extremely low” NFIP take-up

By Chris Munro

July 10 - (The Insurer) - Most of the central Texas counties impacted by the devastating July 4 flash flooding have “extremely low NFIP participation levels” even though the region is highly vulnerable to the peril, Guy Carpenter said on Thursday.

As of July 10, at least 119 people have been killed across Texas, with another 173 people still unaccounted for, after heavy rainfall caused catastrophic flash flooding that was spurred by a convective system.

That system was fuelled in part by remnant moisture from former Tropical Storm Barry.

The heavy rainfall, which lasted between July 3 to 6, caused the Guadalupe River in Central Texas to swell and rise significantly.

Kerr County has been hit hardest, and over 12,000 structures were damaged in Tom Green County alone.

The areas impacted by the flooding fall within an area in Texas nicknamed Flash Flood Alley, a region that Guy Carpenter said is “known for its often and occasionally deadly flooding”.

Even though the region is highly susceptible to flooding, Guy Carpenter said most “central Texas counties devastated by the July 4 weekend flash flooding show extremely low NFIP participation levels”.

“Despite the well-documented flood vulnerability of the Hill Country, these inland regions lack the insurance coverage seen in coastal counties, such as Harris and Galveston,” the reinsurance broker said.

“The disaster along the Guadalupe River underscores the growing protection gap in areas where flood risk is high, but perceived risk and insurance uptake remain low,” it added.

Further evidence of that dynamic can be seen in the limited uptake of the highest flood mitigation standards in the impacted region.

The NFIP oversees a voluntary program called the Community Rating System (CRS) which rewards communities that implement floodplain management practices and which exceed its minimum requirements.

“Only 17% of CRS-participating communities in Texas have achieved a Class 5 or better rating, highlighting the limited uptake of the highest flood mitigation standards for the state,” Guy Carpenter said.

The reinsurance broker’s commentary comes after AccuWeather on Monday released an estimate that the floods will result in total damage and economic losses of $18 billion to $22 billion.

That $18 billion to $22 billion range includes costs from insurance claims along with the search and recovery efforts, what will be an extensive cleanup operation and the impact on future tourism in the region.

As AccuWeather noted, while water damage is costly to repair, it is not usually covered by homeowner’s insurance policies.

Consequently, many homeowners are often underinsured for flood damage.

Research by The Insurer shows that across the six counties worst affected by the floods – Kerr County, Travis County, Burnet County, Kendall County, Williamson County and Tom Green County – the NFIP has over $3.80 billion of exposure, as of May 31, 2025.

Data from the NFIP shows that Kerr County had $133.4 million of exposure come the end of May 2025.

Travis County has $2.41 billion of NFIP exposure, as of May 31, 2025, with $1.73 billion of that within the City of Austin.