The sun came out Thursday, but Central Texas was slow to dry out in the wake of record setting rains brought by the vestiges of Tropical Storm Hermine.

Flooding wrecked homes, ruined shops and led to the deaths of at least three people statewide. In Central Texas, two people swept away in floodwaters remained missing, including Austin resident Jennifer Ring. Search teams Thursday recovered the body of a 23-year-old Michigan native from the Guadalupe River in Comal County.

Gov. Rick Perry declared 40 Texas counties to be disaster areas because of flooding and damage caused by the storm. Perry said the move "will make all the historical sources of funding available."

The next step would be for the Texas Division of Emergency Management to conduct damage estimates in each of the affected areas and determine whether those areas qualify for state help or federal relief, which could come from the Small Business Administration, the Federal Emergency Management Agency or other agencies.

Perry also said he activated the Texas National Guard, 10 high-profile vehicles and two Black Hawk helicopters to aid in recovery efforts.

Mark Hanna, a spokesman for the Insurance Council of Texas , a trade association of about 500 property and casualty insurers, said he expects 10,000 homeowner claims and 500 auto insurance claims statewide.

"Estimated insured losses statewide will exceed $50 million," Hanna said.

U.S. Geological Survey officials said official rain totals weren't yet available, but David Walker, supervisor of the river operations center for the Lower Colorado River Authority, estimated that more than 12 inches of rain fell in 12 hours.

In Round Rock, water flooded 81 houses, some of which were inundated with up to 5 feet of water. The Lake Creek area was the hardest hit in Round Rock, said Will Hampton, a city spokesman. City crews placed trash bins in flooded neighborhoods and used front-end loaders to help with debris pickup.

Ehrin Parker was among residents along St. William's Loop, which borders Lake Creek, who were busy Thursday mopping mud from their homes and taking pictures of their ruined possessions to provide to insurance companies. The first floor of Parker's two-story house was destroyed, she said.

"I'll tell you what I've learned from the flood," Parker said. "A fireproof box is not waterproof."

Parker, who is married and has four children, said she kept all of her family's important documents in a safe that was filled to the top with water when she opened it Wednesday morning.

Mike Erdmann, general manager of the Brushy Creek Water Control and Improvement District , said Lake Creek's only dam did not play a role in the flooding. The dam is about three miles west of Round Rock, and water did not reach the top of it during the storm, Erdmann said. "It operated properly."

The flooding was downstream from the dam and was probably caused by the heavy rainfall in a short period of time, he said. The large amount of impervious cover — including at the Austin White Lime Co. on McNeil Road — upstream from the Lake Creek neighborhood probably exacerbated the problem, he said.

The district doesn't have the money to build any more dams on Lake Creek, Erdmann said. The water district has spent $10 million to $12 million to repair 17 dams on the tributaries of Brushy Creek and plans to upgrade the dam on Lake Creek this year, he said.

It is about 46 feet tall, and the district plans to raise it five feet more so that it could hold a 44-inch rainfall in 24 hours, Erdmann said. "Any improvements to it wouldn't have mattered to the Lake Creek neighborhood."

Members of Celebration Church in Georgetown were helping residents along Lake Creek Drive in Round Rock, including Mike Lawson, with cleanup.

Lawson still had a kayak in his living room Thursday that he planned to use to evacuate him and his wife. When his house flooded Wednesday, however, water was rushing too quickly down the street to make kayak travel safe. He said firefighters rescued him and his wife.

"Unfortunately, we just renegotiated our flood insurance, so we had less coverage," Lawson said.

Round Rock City Manager Jim Nuse said homes in the area were mostly constructed before 1980 and built on low ground. Nuse said the city will be waiving building permit fees for homes damaged by the flood.

Neighborhoods that have historically flooded in Austin, saw minimal damage from the torrential rains Tuesday and Wednesday. However, several parks were devastated, portions of RM 2222 at Bull Creek collapsed, and a boating ban was extended through noon today on Lake Austin, Lady Bird Lake, the Colorado River below Longhorn Dam and all creeks in the city, including Barton Creek.

Across the state, residents continue to take stock of damage. On Thursday morning, the governor toured some of the damage from a state helicopter. "We saw a lot of damage," he said later at a news conference in Bell County, which he said "has been particularly hard hit."

Perry added that he saw the "amazing power of nature."

In the city of Holland, a farming town in Bell County, residents ran out of water after a water main was broken by rushing storm waters. Bell County Commissioner Tim Brown said floodwaters would need to recede before the line can be fixed and service can be re-established to Holland's residents.

Holland Mayor Mae Smith said the town of 1,200 people could have service in two or three days.

"I hope we have water by Saturday," Smith said after spending Thursday morning distributing gallons of bottled water.

In nearby Salado, Judy Miller, the owner of Miller Fine Art, said her gallery sustained severe damage. Floodwaters rose about 4 feet up the gallery's walls. The gallery was only a matter of yards away from Salado Creek and a historical marker that notes that bridges over the creek were destroyed by floods in 1900, 1921 and 1931.

Miller said she saved most of the art in the gallery but said the flooding made her ponder the future of her business.

"I won't be reopening in this location, and I don't know if I'll open at all," she said. "I have to regroup, think."