Texas Floods: New Report Details Dire Insurance Fallout of July 4th Disaster
FOR IMMEDIATE RELEASE
October 8, 2025
Contact: contact@insurancefairnessproject.com
Texas Floods: New Report Details Dire Insurance Fallout of July 4th Disaster
Today, the Insurance Fairness Project released its report, Underwater and Uninsured: How the Insurance Crisis Exacerbated July 4th’s Texas Disaster. The report details how the ongoing insurance crisis worsened the impact of the July 4th Texas floods.
As climate-driven disasters intensify, the unraveling insurance system is leaving a growing number of Americans dangerously exposed. Homes and communities are being destroyed by wildfire, floods, or hurricanes. When the disasters subside, the financial devastation sets in. The deadly and destructive July 4th flash floods across Central Texas exposed the overwhelming convergence of climate-fueled disasters, systemic underinsurance, and the failure of elected officials to support communities when disaster strikes. The data collected by the Insurance Fairness Project in this report shows the shortcomings leading up to the disaster and what actions are needed from regulators, elected officials, and insurers to slow the accelerating costs and impacts of the insurance crisis.
“The July 4th floods left Texans underwater twice: first by the floods themselves, and then by a broken insurance system that abandoned families when they needed it most,” said Lizzy Price, a spokesperson for the Insurance Fairness Project. “What happened in Texas is a warning for the rest of the country - the insurance system that is supposed to keep us afloat is not working. The floods killed at least 138 people, wiped out homes and businesses, and caused up to $22 billion in total damage. Relatively little of the damage was covered by insurance, so homeowners, business owners, and taxpayers are now shouldering the costs of rebuilding their communities.”
Some key findings from the report:
The Texas floods caused up to $22 billion in economic damage, most of it uninsured. Just 3% of the disaster’s victims had flood insurance. The average Texan pays $4,000/year for home insurance — and some households pay up to $15,000. Faced with these staggering costs, many families have to make the hard choice of going underinsured or forgoing insurance entirely.
3,000 businesses were damaged or destroyed in the floods. Many will never be able to reopen either because insurance won’t cover the costs of recovery or because their customers are gone.
FEMA’s response has been riddled with delays, disparities, and denials, especially in the hardest-hit communities.
Before the floods, nearly half of claims filed with the insurers in Texas were closed without payment. Will this number rise in the post-flood recovery?
Recommendations include:
Invest in updating and modernizing flood maps and other critical vulnerability data: By setting aside funds to improve and sustain data collection, run risk scenarios, and analyze the implications of hazards, states can make informed decisions about needed resilience investments and help the public gain a better understanding of climate risk throughout the state. Providing resources for accurate flood mapping is crucial for responsible decision-making.
Integrate community resilience-building into insurance pricing and underwriting: States can harmonize insurance regulation with the community and household investments that are needed to drive down insurance losses by requiring insurers to factor climate resilience into their pricing and underwriting.
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The Insurance Fairness Project is an information hub dedicated to offering insights into the home insurance crisis, exploring its drivers and highlighting solutions alongside issue experts and community advocates.
