Commercial property insurance for Houston owners.

Flood

Hurricane Harvey flooded 154,170 homes in Harris County in August 2017. Slightly under half of them were outside the 100- and 500-year floodplains, according to the Harris County Flood Control District's final report.

Standard commercial property policies exclude flood. The National Flood Insurance Program covers non-residential buildings up to $500,000 and their contents up to $500,000, so owners of larger buildings often look at excess or private flood as well.

After Harvey, the City of Houston's floodplain rules (Chapter 19) began requiring new buildings and substantial improvements in the 100- and 500-year floodplains to sit two feet above the 500-year flood elevation. Rebuilding to current code can cost more than the building it replaces. Ordinance or law coverage can help with code-driven costs after a covered loss, up to its limits. Property policies exclude flood, so after a flood the flood policy applies: NFIP policies include Increased Cost of Compliance coverage of up to $30,000 in some cases.

FEMA's new flood maps for Harris County (the MAAPnext study) are drafts, published for information only. They can't be used for insurance or regulatory decisions. Flood zones change only when FEMA's maps become effective, and lenders can set their own flood requirements.

Questions to ask: which flood zone each building is in, whether your flood limits reflect what it would cost to rebuild, and how the flood deductible and waiting period work.

Named Storms & the Highway 146 Line

Most of Harris County is outside the Texas Windstorm Insurance Association's (TWIA) coverage area. Areas east of Highway 146 within the city limits of La Porte, Morgan's Point, Pasadena, Seabrook and Shoreacres are inside it, as are the 14 first-tier coastal counties, including neighboring Galveston, Brazoria and Chambers.

Many Houston-area policies carry a named-storm deductible set as a percentage of insured value (per building, per location or for the whole schedule, depending on the wording), not of the claim. Even a Category 1 hurricane can leave a large share of a loss with the owner.

Questions to ask: who covers wind at each location, what the named-storm deductible comes to in dollars, and what your loan documents require for wind coverage.

Thunderstorm Wind & Hail

Damaging wind in Houston isn't only from hurricanes. On May 16, 2024, a derecho brought "a swath of 100+ mph winds" through the Houston metro, according to the National Weather Service, with widespread damage.

Which deductible applies to a storm like that depends on the policy wording. Many Texas policies carry a separate wind and hail deductible, often a percentage of each building's value.

Questions to ask: which deductibles apply to wind and hail, what each comes to in dollars, and how the policy pays for roofs and glass.

Power Outages

Hurricane Beryl made landfall on July 8, 2024. It caused 2.26 million CenterPoint Energy outages in the Houston area, and some customers were still without power eight days later.

Business income insurance is generally written around physical damage at your own property. When the outage comes from damaged power lines or utility equipment somewhere else, coverage may depend on utility services coverage, and some versions leave out overhead lines unless they're added.

Questions to ask: whether your policy covers off-site power failure, whether overhead lines are included, how long the waiting period is, and whether refrigerated stock has spoilage coverage.

Freeze

Winter Storm Uri in February 2021 brought days of freezing weather to the Houston area. Statewide, commercial property made up about 10% of the claims but 53% of the incurred losses, according to the Texas Department of Insurance.

A vacancy clause, a condition to keep heat on or drain the pipes, or a protective safeguards condition (such as keeping sprinklers working and monitored) can affect a freeze claim, especially at a vacant or partly leased building.

Questions to ask: what the policy requires for vacant space, and what your water-damage deductible is.