Hurricane Ike, which struck the United States in September 2008, was the ninth most expensive hurricane in terms of damages. It caused nearly USD 30 billion in damage after making landfall on the Bolivar Peninsula, Texas. We used the Delft3d-FM/SWAN hydrodynamic and spectral wave model to simulate the storm surge inundation around Galveston Bay during Hurricane Ike. Damage curves were established through the relationship between eight hydrodynamic parameters (water depth, flow velocity, unit discharge, flow momentum flux, significant wave height, wave energy flux, total water depth (flow depth plus wave height), and total (flow plus wave) force) simulated by the model and National Flood Insurance Program (NFIP) insurance damage data. The NFIP insurance database contains a large amount of building damage data, building stories, and elevation, as well as other information from the Ike event. We found that the damage curves are sensitive to the model grid resolution, building elevation, and the number of stories. We also found that the resulting damage functions are steeper than those developed for residential structures in many other locations.