Insurance Premiums Reduced for Fortified Houses that Qualify
June 20, 2018, The Southeast Sun
Insurance Industry Initiatives to Collaborate and Partner for Catastrophe Resiliency
CIPR Newsletter, November 2016
Building a Wildfire-Resistant Home: Codes and Costs November 2018, EdgeWater Economics
Building a More Resilient Future
Presentation to the NAIC/American Indian and Alaskan Native Liaison Committee, August 2016
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Director of Public Affairs
Senior Researcher, CIPR
Last Updated 1/14/2019
Issue: The insurance industry supports improved construction, maintenance and preparedness practices through its support for the Institute for Business & Home Safety (IBHS). IBHS is a nonprofit, scientific research and communications organization soley funded by property (re)insurers. It conducts building safety and mitigation research to identify the most effective ways to create more resilient communities. This research is then used to produce actionable disaster-resistant measures for homeowners and businesses. This includes a variety of emergency preparedness and response planning resources, such as toolkits, guides, safety tips and workshops. Its research also informs its FORTIFIED construction standards for new and existing buildings.
Overview: The diversity of the geography in the U.S. exposes us to numerous weather-related perils, including hurricanes, wildfires, droughts, flooding, and snowstorms. Construction and population growth in areas of higher natural hazard risk have made our country more susceptible to losses from natural catastrophes. Climate variability is expected to bring the potential for more extreme weather events and higher economic and insured losses. Improving the resilency of our nations infrastructure is a critical part of mitigating against natural hazard risk and the potential financial impact.
IBHS plays a critical role in improving our nation’s resilency by conducting building safety and mitigation research to identify the most effective ways to create more resilient communities. At its research center in South Carolina, IBHS engineers test the performance of full-scale residential and commercial structures during simulated severe weather events, including hurricanes, hailstorms, windstorms, wind-driven rain, wildfire ember storms. Scientists also perform field testing in states with high exposure to hail. The data gathered through its scientific research is then used to inform builders, homeowners and businesses on disaster-resistant construction and mitigation practices. It also informs its FORTIFIED program, a set of voluntary, national standards for resilient construction.
FORTIFIED Home is a national program being rolled out sequentially with FORTIFIED Home™—High Wind and Hail launched in the spring of 2016 in Oklahoma during the National Tornado Summit, and expanding to Colorado next. Exposure to severe winds and hail in these states make them particularly well-suited for this program. The nation’s first FORTIFIED Home—High Wind and Hail homes were built in Tulsa in 2016. FORTIFED Home—High Wind and Hail homes are expected to virtually eliminate property damage from low-level tornadoes with EF0-EF1 wind speeds. This level of resilience can make a big difference in property losses for states like Oklahoma who experience numerous tornadoes each year.
The IBHS FORTIFIED Home™—Hurricane program was initiated in 2010, and focused first on the Gulf Coast states. With its unique systems-based, holistic focus, FORTIFIED Home™—Hurricane is affordable at any price point with three levels of designation – Bronze, Silver and Gold, providing homeowners with the ability to choose the level that best meets their mitigation needs and budget. The IBHS system approach improves performance of the home helping reduce losses from hurricanes and other events. This in turn improves insurers’ ability to model losses and more accurately assess the benefits of utilizing FORTIFIED standards.
IBHS also provides planning resources to assist business owners prepare and recover from disasters. This includes its free non-technical business continuity toolkit, OFB-EZ® (Open for Business-EZ). OFB-EZ® focuses on recovering after the initial emergency response. It’s complimented by IBHS’ EZ-PREP (Severe Weather: Emergency Preparedness and Response Planning) toolkit. EZ-PREP was developed to help keep small businesses “open for business”. It is designed as a stand-alone guide, along with a customizable checklist, that can be used by any small business to build a plan for responding to operational disruptions.
Status: According to Julie Rochman, CEO and president of the IBHS, FORTIFIED Home is fast becoming the national construction standard for repairing, rebuilding, renovating or building a new home that is resilient. Several jurisdictions have incorporated some of the FORTIFIED Home standards into their building code requirements in response to extreme weather events. This includes Alabama, Georgia, Mississippi and North Carolina, who have enacted various regulatory incentive and mitigation expense reduction programs for homes meeting FORTIFIED standards. Alabama and Mississippi have enacted legislation requiring admitted insurers in their states to provide FORTIFIED homes premium discounts in specified coastal counties at higher risk for hurricanes. The Mississippi Windstorm Underwriting Association (MWUA) and the Georgia Underwriting Association (GUA) provide property insurance wind premium credits to FORTIFIED homes. The MWUA and the GUA function as the market-of-last-resort in their respective state. The North Carolina Rate Bureau provides mitigation incentives to FORTIFIED homes in 18 coastal counties.
IBHS and disastersafety.org/fortified