The reality of your car insurance is that you had automatic coverage for a newly acquired vehicle the moment you acquired the vehicle BUT only for the same coverages as the vehicle already on the policy.
Here is a word for word quote from a Texas auto insurance policy:
“Your covered auto” means:
1. Any vehicle shown in the Declarations;
2. I. Any of the following types of vehicles on the date you became the owner:
a. a private passenger auto; or
b. a utility type vehicle, with a G.V.W. of 25,000 lbs. or less, of the pickup body, sedan delivery,
panel truck, van type and multi-use type, not used for the delivery or transportation of goods,
materials or supplies other than samples; unless, (1) the delivery of goods, materials or supplies
is not the primary usage of the vehicle, or (2) used for farming or ranching.
II. This provision (G.2) applies only if you:
a. acquire the vehicle during the policy period; and
b. notify us within 30 days after you become the owner.
If the vehicle you acquire replaces one shown in the Declarations, it will have the same coverage as the vehicle it replaced. You must notify us of a replacement vehicle within 30 days only if you wish to add or continue Coverage for Damage to Your Auto.
Therefore you do not have coverage for the flood damage.
Whether or not you can rescind your purchase or have any recourse against the dealer depends on what's written in the purchase contract and the loan agreement and NOT on what you were "told."
My highly educated guess is that, ultimately, you will be stuck with the car and have to pay for the repairs yourself.

