A new Alabama study of homes affected by Hurricane Sally (2020) shows that using reinforced building standards (Fortified) significantly reduces home damage and insurance costs. Research has found that if all houses in Mobile County and Baldwin County meet this standard, insurance companies can save 112 million US dollars, homeowners’ deductiables can be reduced by 65%, and nearly 35 million US dollars can be saved. This standard was formulated by the non-profit organization IBHS and includes measures such as strengthening roofs and impact-resistant doors and Windows. Currently, 80,000 households in 32 states across the United States have adopted it, among which 53,000 are in Alabama.
Alabama promotes the adoption of Fortified standards through its mandatory insurance discount and subsidy program and has funded 8,700 home renovations with $86 million since 2015. Research shows that the frequency of eligible housing claims has decreased by 55% to 74%, and the severity of losses has reduced by 14% to 40%. Although the reinforcement cost is relatively high (0.5%-3% for new houses and 6%-16% for renovations), the long-term benefits are significant, attracting many non-profit organizations and insurance companies to participate in the promotion.
This research provides an example for the United States to deal with climate disasters. Mark Fowler, the insurance commissioner of Alabama, said that the idea that preventive reinforcement can reduce disaster losses has attracted attention in places like California. California is considering passing a similar bill to fund fire prevention measures to address the risk of wildfires. Fowler emphasized: “Natural disasters cannot be avoided, but early reinforcement can significantly reduce losses.”
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