News Summary
A recent study in Alabama highlights that homes constructed or retrofitted to climate-resilient ‘Fortified’ standards significantly lower insurance claims after hurricanes. Analysis following Hurricane Sally indicates that if homes in Mobile and Baldwin counties adhered to these standards, insurance expenditures could have decreased by 75%. With examples of reduced deductibles and insurance savings, this research emphasizes the financial benefits of resilient construction in addressing climate change challenges.
Alabama has unveiled a new study revealing that homes constructed or retrofitted to climate-resilient “Fortified” standards significantly minimize insurance claims following damaging hurricanes. The research, which analyzed thousands of insurance claims from Hurricane Sally, demonstrates that adhering to innovative construction methods could lead to substantial financial benefits for homeowners and insurers alike.
Hurricane Sally struck Alabama’s coast in September 2020, packing winds that hit up to 105 mph. The study pinpointed that homes meeting Fortified standards faced notably lower insurance claims compared to those that did not. If all homes in Mobile and Baldwin counties had been Fortified, insurance companies would have spent approximately 75% less on claims, translating to potential savings of around $112 million. Moreover, policyholders could have benefited from a reduction of 65% in deductibles, saving nearly $35 million.
The findings underline how effective mitigation and resilient construction can be in the face of climate change challenges. Dr. Lars Powell, director of the Center for Risk and Insurance Research at the University of Alabama, emphasized that adopting such measures is crucial in an era where insurance markets are strained by increasingly frequent and costly climate events. This need is exacerbated by declining federal funding for resilience projects that aim to protect communities.
Details of the Fortified Program
The Fortified program was established by the Insurance Institute for Building and Home Safety (IBHS) to bolster the storm resilience of homes, with research backed by studies conducted at its wind tunnel facility. This initiative categorizes homes into three designations: Fortified Roof, Silver, and Gold. These designations are achieved through improved building methods, including enhanced roof fasteners, impact-resistant doors and windows, and secure wall foundations.
Currently, approximately 80,000 homes across 32 states are accredited with Fortified designations, with over 53,000 of these located in Alabama alone. Following Hurricane Ivan, which in 2004 caused about $14 billion in damages and led to insurance companies pulling out of the market, Alabama adopted proactive measures for storm preparedness. Homeowners who build or retrofit their residences to meet Fortified standards can receive discounts on their wind insurance premiums, sometimes reaching reductions of up to 50% off that portion of coverage.
Strengthen Alabama Homes Program
The Alabama government supports this initiative through the Strengthen Alabama Homes program, which provides grants of up to $10,000 for homeowners to retrofit their properties to Fortified standards. Since its inception in 2015, this program has distributed around $86 million for around 8,700 home retrofitting projects. Research has indicated that homes completed under Fortified construction protocols see a 55% to 74% decrease in claim frequency, alongside a 14% to 40% reduction in loss severity.
Despite making up nearly a quarter of the policies studied, Fortified homes accounted for just 9% of total claims. This stark contrast can be attributed to stricter verification requirements that ensure these homes meet elevated construction standards. Although enhanced standards do incur additional costs—new constructions can be 0.5% to 3% more expensive, with retrofitting costing between 6% and 16% more—the long-term savings on insurance claims can vastly outweigh these initial expenses.
Community Involvement and Future Plans
Nonprofit organizations such as Habitat for Humanity and Team Rubicon have also adopted Fortified construction methods in their rebuilding endeavors, aided by philanthropic support from insurers. With the success of the Fortified program, Alabama plans to expand its grant offerings to include three more counties this year. Other states, including California, are now looking to Alabama’s strategy as a template for developing similar resilience measures.
While Fortified homes effectively mitigate certain hurricane-related claims, they do not account for all potential issues, as fallen trees represented nearly half of the claims in the study. Nevertheless, Alabama’s approach has led to a stabilized insurance market for coastal homeowners, contrasting with rising premiums in other states. Following the successful outcomes from Hurricane Sally, the Fortified building standard has gained significant credibility, reinforcing its role in enhancing community resilience against future climate threats.
Deeper Dive: News & Info About This Topic
- ABC News: Alabama Study Reveals Hurricane Resilience Programs Paying Off
- AL.com: Alabama Celebrates 50,000 Fortified Homes
- Fine Homebuilding: Bracing for the Storm
- Fox Weather: Hurricane Zone Insurance Rankings
- Scientific American: Hurricane-Resistant Building Code Helped Protect Alabama
- Wikipedia: Hurricane Safety
- Google Search: Hurricane Resilience Programs
- Google Scholar: Hurricane Resilience
- Encyclopedia Britannica: Hurricane Preparation
- Google News: Hurricane Fortified Homes
Author: STAFF HERE BIRMINGHAM WRITER
The BIRMINGHAM STAFF WRITER represents the experienced team at HEREBirmingham.com, your go-to source for actionable local news and information in Birmingham, Jefferson County, and beyond. Specializing in "news you can use," we cover essential topics like product reviews for personal and business needs, local business directories, politics, real estate trends, neighborhood insights, and state news affecting the area—with deep expertise drawn from years of dedicated reporting and strong community input, including local press releases and business updates. We deliver top reporting on high-value events such as the Sidewalk Film Festival, Sloss Music & Arts Festival, Magic City Classic, and civil rights commemorations. Our coverage extends to key organizations like the Birmingham Business Alliance and the Birmingham Civil Rights Institute, plus leading businesses in healthcare, finance, and manufacturing that power the local economy such as UAB Medicine, Regions Bank, and Encompass Health. As part of the broader HERE network, including HEREHuntsville.com, we provide comprehensive, credible insights into Alabama's dynamic landscape.
