BREAKING NEWS: According to an Alabama study, homeowners and insurers benefit from fortified homes.
A recent research conducted in Alabama on homes damaged by hurricanes makes it abundantly evident to homeowners and insurers around the country that using climate-resilient building techniques may both safeguard homes and save a significant amount of money.
Thousands of insurance claims related to Hurricane Sally, which hit Alabama’s coast in 2020 with wind gusts of up to 105 miles per hour, are examined in this week’s first-of-its-kind investigation. Significantly fewer and less expensive claims were filed for homes that were modified or constructed in accordance with Fortified standards, a voluntary design code developed by the nonprofit Insurance Institute for Building and Home Safety (IBHS) to mitigate wind and rain.
According to the report, insurance companies could have saved up to $112 million by reducing claims by 75% and policyholders could have saved nearly $35 million by lowering deductibles by up to 65% if all affected homes in Mobile and Baldwin counties had complied with Fortified standards.
Dr. Lars Powell, director of the Center for Risk and Insurance Research at the University of Alabama’s Culverhouse School of Business, which oversaw the study in collaboration with the Alabama Department of Insurance, said the findings demonstrate that “mitigation works and that we can build things that are resilient to climate change.”
The burden of increasingly costly and frequent climate catastrophes is causing insurance markets across the United States to falter, and federal funding for resilience initiatives that could lessen that harm is dwindling. The study’s officials and researchers say it demonstrates that Alabama’s proactive response to the problem—mandatory, substantial insurance reductions for Fortified users and a grant program to help them pay for it—could serve as a nationwide model for boosting safety and insurability.
Based on decades of study at its facilities, where it utilizes a gigantic wind tunnel to batter model houses with rain, hail, and wind up to 130 miles per hour, IBHS developed Fortified to fortify buildings against storm damage.
According to Fred Malik, executive director of the Fortified program, “we have been looking for meaningful ways to reduce the severity and the frequency of those losses because we are having record breaking year after record breaking year of disasters and insured losses.”
The Fortified Roof, Silver, and Gold classification levels include techniques such as upgrading roof fasteners, installing impact-rated windows and doors, and more firmly fastening walls to their foundation. Third-party work verification is required by the program.
There are already almost 80,000 Fortified homes in 32 states, including more than 53,000 in Alabama.
After Hurricane Ivan rocked the state’s insurance industry in 2004, the administration started searching for ways to enhance storm outcomes. “Ivan was absolutely devastating,” Mark Fowler, the commissioner of insurance for Alabama, said. “Insurers were fleeing as our market went crazy.”
With obligatory minimum insurance discounts of up to half off the wind part of homeowners’ premiums, it became the only state to impose such a requirement for Fortified homes. Additionally, it introduced the Strengthen Alabama Homes incentive program, which provides homeowners who convert their homes to Fortified standards with rewards of up to $10,000.
Since 2015, the state has allocated $86 million for 8,700 Fortified retrofits. According to Fowler, the program also encouraged contractors and inspectors to become familiar with the standards and sparked a demand for new Fortified buildings.
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