Exclusion of flood coverage from standard homeowners' insurance is not peculiar to the the state of Texas ~ it's nationwide.

Flood insurance is federally subsidized and really quite cheap, and mortgage holders in areas known to be flood-prone are generally required by their lenders to buy it. I was covered for Katrina for that very reason, and was quite nicely compensated (although I had to wait six months for the check).

If your house note is paid off, or if you live outside of any "flood plain," you probably never thought to buy flood insurance, and if an unforeseen storm or dam-break or snow-melt, etc., hits you, no homeowners policy will compensate for your losses.

Those properties in Galveston are most likely covered by flood policies. However, a lot of homes further inland in Texas are going to flood, and very few of their owners will be covered.

Last week, Gustav caused widespread flooding in Alexandria, LA, way up in the center of the state. I seriously doubt that many folks up there ever bought flood insurance.