Climate-Proof Construction: A Potential Solution to Rising Homeowner Insurance Costs
The increasing frequency and intensity of climate-related disasters are making homeowner insurance more expensive and difficult to obtain across the United States. In response, some states are implementing innovative solutions to mitigate these risks. One such strategy involves ‘climate-proofing’ homes through specialized construction techniques and materials, which could potentially save homeowners money on insurance premiums.
In Alabama, a pioneering program has been encouraging homeowners to adopt ‘fortified’ roofs designed to withstand hurricanes and other extreme weather events. These roofs feature a waterproof layer and special nails that make them more resistant to wind damage. Homeowners who install such roofs can receive significant discounts on their insurance premiums, ranging from 20% to 35% off the wind portion of their policy.
The effectiveness of these fortified roofs has been demonstrated in practice. After Hurricane Sally made landfall in Alabama in 2020, homes with these specialized roofs filed fewer insurance claims and for less damage compared to those with standard roofs. This success has prompted other states, including Louisiana and Mississippi, to adopt similar programs.
Beyond roofing, homeowners in wildfire-prone areas like California are taking steps to ‘fire harden’ their properties. This involves using fire-resistant materials for decks, siding, and roofs, as well as maintaining defensible space around homes. While insurance discounts are available for such measures, they are currently lower than those offered in Alabama, ranging from 8% to 15%.
However, experts point out that simply making individual homes more disaster-resistant may not be enough. In the case of wildfires, the risk is often influenced by the condition of neighboring properties. This interdependence means that insurance companies may be hesitant to offer significant discounts unless entire neighborhoods are taking similar precautions.
Moreover, while insurance discounts can be an incentive, they do not address the more fundamental issue of insurance availability. Many homeowners are being dropped by their insurance companies due to climate-related risks, and those who have taken disaster mitigation measures are not necessarily more likely to retain their insurance coverage. Experts argue that state regulators need to require insurance companies to consider these mitigation efforts when determining coverage eligibility.
As climate change continues to drive more frequent and intense natural disasters, the need for effective solutions to the growing homeowner insurance crisis becomes increasingly urgent. By incentivizing climate-resilient construction and retrofitting, states can help protect homeowners and communities from the financial impacts of extreme weather events.
