Homeowners, renters, and small businesses in Austin are encouraged to consider flood insurance due to the potential for flooding outside of mapped floodplains and high-risk areas. The City of Austin's participation in the National Flood Insurance Program allows residents to access federally-backed flood insurance, with most policies eligible for a 25 percent discount upon renewal. The average annual policy cost in Austin is $670, with lower risk policies available at reduced rates.
A standalone flood insurance policy is required to cover damages caused by flooding. Residents should consult their insurance agents to determine appropriate coverage options, which can include protection for structures, contents, or both. Business owners can also obtain policies covering inventory and other assets.
Jorge Morales, director of Watershed Protection, emphasized the importance of considering flood insurance: “I’ve talked to so many people over the years who have experienced flooding, and their stories are just devastating to hear. If you’ve got room in your budget, I highly encourage everyone to at least think about flood insurance. Call your agent and get a quote. It may cost less than expected, especially if you’re outside the mapped floodplain. Storms are only getting worse, and we do sometimes see them overwhelm our drainage systems.”
Flooding can be financially burdensome, with an average claim in Austin amounting to $21,000 as of 2021. FEMA reports that 25% of businesses do not reopen after a natural disaster; adequate insurance can aid recovery efforts.
Most flood insurance policies are provided through the National Flood Insurance Program. FEMA's recent increase from a 20 percent to a 25 percent discount for Austin policies results from improvements in the city's Community Rating System score. Factors contributing to this score include preserved greenspace within Austin's floodplain, water quality regulations and programs, stormwater management requirements, property buyouts at risk of flooding, and higher regulatory standards for development activities in the floodplain.
However, some residents will see increases in their premiums despite Austin’s improved score due to FEMA’s Risk Rating 2.0 implementation in March 2022. This initiative gradually removes subsidies from existing policies, leading subsidized policyholders' rates to rise by 18% annually until they reach unsubsidized levels.
The City of Austin Watershed Protection Department works to safeguard lives, property, and the environment by mitigating flooding impacts as well as addressing erosion and water pollution issues.
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