But They’re Getting Less Coverage
By Theodore “Ted” Patestos, Tiger Adjusters
The Texas Tribune reported that nearly 1.3 million Texas homes are in areas susceptible to floods. But local governments have limited power to regulate development. The state’s rapid growth and demand for affordable land contribute to the problem, exacerbated by inadequate planning for extreme weather. While some regulations exist, such as building standards tied to federal flood insurance, they haven’t been fully effective.
In 1980, the US National Oceanic and Atmospheric Administration (NOAA) began tracking the number of severe weather events that caused more than $1 billion in losses in the US. That year, there were three “billion-dollar disaster events” as NOAA calls them, including a drought, a flood, and a hurricane.
In the decades that followed, however, the number of billion-dollar disaster events began to increase steadily. From 2015 to 2024, the average number of events per year was 19. But in 2023, 28 billion-dollar disaster events were recorded. And 27 billion-dollar weather and climate disasters occurred in 2024.
More Frequent Disasters Cause Fallout in the Home Insurance Industry
As the amount of damage from disaster events began to increase, insurance companies faced an unprecedented rise in home insurance claims. To avoid heavy losses, the companies responded by raising premiums.
Stats released in 2025 show a 24 percent average increase in homeowner insurance premiums between 2021 and 2024. This was double the pace of inflation for those years. Residents in Illinois were told that State Farm would be raising its home insurance rates by 27 percent beginning in August 2025.
To make matters worse for homeowners, insurance companies also began updating policies in ways that reduced coverage. The introduction of roof surface endorsements, which limit the amount of coverage extended to roofs damaged in windstorms, is an example of a change that cuts into the payout homeowners can expect after experiencing losses.
Ten counties are designated for tax-free federal assistance for the July 2-18 severe storms and flooding in Central Texas. Burnet, Guadalupe, Kerr, Kimble, McCulloch, Menard, San Saba, Tom Green, Travis and Williamson county residents are eligible for disaster assistance. It can include grants for hotel stays or other temporary housing. Or it can be used for basic repairs for flood damage to your home. The money can also be used to help repair or replace appliances, room furnishings, and a personal or family computer damaged by the disaster.
Reductions in Coverage Force Homeowners to Take a Proactive Stance
For policyholders, navigating the new insurance landscape of higher premiums and lower coverage requires a more proactive stance. Policies must be reviewed regularly to ensure they cover the events that homeowners can expect in their region. Additionally, policyholders must pursue a comprehensive understanding of the steps they need to take. Being proactive can help ensure claims are paid out quickly, fairly, and completely.
The following are a few steps policyholders should consider to prepare themselves to address damage they may experience from an extreme weather event.
Ensure Claims are Fully Paid by Properly Documenting Damage
The most common mistake policyholders make is failing to properly document and present the full extent of their damages. Most home insurance policies place the burden of proving the loss on the policyholder. This means it is their responsibility to substantiate the claim. When policyholders aren’t prepared to meet this obligation, they submit incomplete or inaccurate estimates. Thus, they do not clearly demonstrate the loss in a way that supports the claimed value.
Creating a home inventory is a crucial step in substantiating insurance claims in the aftermath of a disaster. The inventory should include a detailed list of each item that documents its date of purchase and approximate value. Once created, the inventory should be stored in a secure location that can withstand floods, windstorms, or other natural disasters.
After an event, homeowners must take steps to document the damage with photos and videos. Creating a written list of all damaged items can streamline the claims process. Policyholders should also ensure that damaged items are not thrown away. Insurance companies may need to review them as part of their investigation.
Hiring a licensed public adjuster can help policyholders navigate the claims process more effectively and avoid common mistakes. Public adjusters are trained to accurately assess damage, prepare detailed estimates, and negotiate with insurance companies to help ensure claims are paid fairly and fully. Unlike insurance adjusters and independent adjusters, who work for insurance companies, public adjusters focus on advocating for policyholders.
Review Policies to Identify Significant Gaps
Homeowners should also regularly review their insurance policies to ensure updates introduced by the insurance company don’t lead to surprise gaps in coverage. Nearly 1.3 million homes in Texas are located in flood-prone areas. This makes it essential for homeowners to read the fine print, ask questions of their agents, and consider supplemental or additional policies to address any gaps in coverage.
For example, hurricanes or severe storms can cause water inundation that results in mold growth. Policyholders may assume that their policy would cover mold damage triggered by stormwater. But a mold coverage endorsement is actually required to address such damage. Damage to landscaping, patios, decks, and fences is also often excluded.
Even when supplemental coverage is in place, homeowners should make sure they understand its limitations. For example, flood policies can still exempt insurance companies from paying for items stored in basements that were damaged by floodwater. While relatively few homes in Texas are built with basements, the issue of basement flood coverage remains relevant for those who have below-grade spaces. This might include finished cellars or sunken living areas.
There may also be limits on coverage for detached structures like garages or sheds, unless specifically included in the policy. And Texans should carefully review policy language for exclusions related to earth movement caused by floodwaters, and for any restrictions on temporary housing costs or additional living expenses after a covered event.
Take Advantage of Grant-Funded Programs
The recent shifts in insurance industry practices have prompted a number of government programs designed to provide relief to homeowners. For example, the My Safe Florida Home Program utilizes $280 million allocated by the Florida legislature to help policyholders implement upgrades to their homes that can make them eligible for home insurance discounts. Programs like My Safe Florida Home not only make homes more resilient to extreme weather events. They also increase their overall value and marketability. It’s a proactive investment in both safety and long-term savings.
While Texas does not currently have a statewide initiative exactly like My Safe Florida Home, it does offer some resources through local and regional efforts. For instance, the Texas Department of Insurance and the Texas Division of Emergency Management provide educational materials, preparedness tips, and occasional grant opportunities for mitigation projects, particularly in flood-prone communities. However, these programs tend to be more fragmented and may not provide direct financial assistance for home hardening on the scale seen in Florida. Homeowners in Texas often rely on federally sponsored initiatives, such as FEMA’s Hazard Mitigation Grant Program, local government incentives, or insurance premium discounts for implementing risk-reducing measures. Nevertheless, the growing frequency of severe weather events could prompt Texas to consider more comprehensive, statewide grant-funded programs in the future.
Is Relief in Sight?
Scientists have warned that the increase in extreme weather events driving the recent changes in the insurance industry will most likely continue. Consequently, homeowners should not expect changes to their policies or increases in their premiums to be rolled back anytime soon.
Navigating the new normal for homeowners’ insurance requires policyholders to understand their policies, prepare for possible claims well in advance, and address coverage gaps as they arise. Those who are proactive with those steps will be best equipped to avoid underpayments, delays, and denials of coverage.
ABOUT THE AUTHOR
Theodore “Ted” Patestos is co-founder and CEO of Tiger Adjusters based in Houston. A seasoned innovator and policyholder advocate in the public adjusting industry, Patestos consistently champions tools and strategies that bring greater transparency, efficiency, and value to both consumers and adjusters. His work includes the development of systems and the forward-thinking technologies that reduce friction in the claims process. Tiger Adjusters has recovered millions of dollars in settlements on behalf of clients across the country.
THIS ARTICLE ORIGINALLY APPEARED IN VOL 4 2025
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