How to reduce exposure to wind damage

MITIGATION

Mitigation is the process of reducing the exposure risk to damage from hurricanes through land use, regulations, Building Codes & standards,  construction methods, and inspection.

 

AL DOI Deputy Commissioner Charles Angell's
Presentation to Wind Insurance Symposium 12/4/2013

Click on link to download PowerPoint presentation

Posted 1/28/2014

Grants to help limit wind damage

From article by Mike Kaylor in The Courier 10/22/2013

More than $400,000 is available to help residents of Baldwin County weatherize their homes.

State Rep. Steve McMillan joined with representatives of the Al. DOI & FEMA last week to announce a grant program that provides $432,184 for Baldwin & $203, 736 for Mobile County.  Grants up to $5,000 will be awarded to homeowners through the Strengthen Alabama Homes Act of 2011.

'We're going to turn on the application process on October 28' said Charles Angell, Al DOI Deputy Director.  'We're suggesting people either need to get on line or call quickly'.  Grants will be approved on a first-come basis, he added. 'There's enough grant money for approximately 120 homes.'

The program assists homeowners in protecting their homes against wind damage. It pays 75% of the cost to refinforce the home against hurricane winds. Repairs include roof sealing, roof deck attachments and impact resistant doors and windows.

In order to be eligable, the home must be the primary residence, a single family structure and owner occupied. It also must be structurally sound abd be covered by wind and flood insurance policies.

Additional information can be found on the Al DOI website or by calling 1-800-433-3966

Posted 10/23/2013

IBHS Updates Report on Hurricane-Prone States’
Building Codes

Just in time for the height of the hurricane season, the Insurance Institute for Business & Home Safety (IBHS) has released a midterm update to its Rating the States Report, which reviews the progress that the 18 most hurricane-prone coastal states along the Gulf of Mexico and the Atlantic Coast have made in strengthening their residential building codes.

From Insurance Journal August 22, 2013 article

Posted 9/1/2013

GOV. BENTLEY THINKS MITIGATION IS THE SOLUTION

Because of the nature of the standards that require insurance companies to give reductions due to mitigation, virtually NO existing homeowner can get a 35% reduction in premiums.  The best that the vast majority of existing homeowners can do is a 15% reduction, after considerable expense mitigating. That reduces a $3,000 premium to $2,550, still nearly three times the state average.

Posted 12/5/2012

PRESS REGISTER CONTINUES TO PUSH MITIGATION AS SOLUTION TO HOMEOWNERS INSURANCE CRISIS

The Mobile Press register published Monday, August 27, 2012, an editorial by Leslie Chapman-Henderson, president and CEO of the Federal Alliance for Safe Homes, known as FLASH, which is the country’s leading consumer advocate for strengthening homes and safeguarding families from natural and manmade disasters.

Alabama has made progress on storm protection, but more work needs to be done

As you might expect from its author's credentials, the article stresses the importance of adopting, encouraging compliance with, and enforcing stronger building codes.

HHII does not dispute the value of building stronger homes but this approach does nothing to solve the insurance crisis in the near term.  It is a long term solution which will take years to implement.  Additional building inspectors will need to be hired and trained at a time when coastal counties are already hard-pressed for funds.  And how does it help the owners of older homes that cannot easily be reinforced to meet the new standards?

Mitigation only reduces the risk exposure for the insurance industry but does nothing to reduce the cost of insurance for homeowners. 

The Clarity law requires insurance companies to furnish financial data on premiums collected and claims paid. Only if these data are pure and factual, will they show whether the extrordinarily high coastal insurance premiums are justified.

Posted 8/27/2012

Baldwin County cities gear up for stronger building codes

By Kathy Jumper, Press-Register, March 12, 2012
Read complete article

Hurricane Ivan blew through Baldwin County in 2004 and took off thousands of rooftops -- causing hundreds of thousands of dollars in water damage to home interiors.

The 2012 International Building Code and coastal supplements for roof systems, impact glass and shutters can help prevent water damage to homes, which accounts for 75 percent of all insurance claims after wind, according to local building officials in Baldwin County.

It could also, they hope, lower insurance premiums.

Baldwin County enacted the 2012 code on Jan. 17, according to Mike Howell, the county’s building official, who has been meeting with mayors and building officials at all county municipalities about the new code requirements. "We’re trying to get everybody on the same page to get better insurance prices and get more carriers here," Howell said. "The main thing is the sealed roof deck."

The coastal supplements for 2012 are based on Fortified for Safer Living standards, according to Carl Schneider of Schneider Insurance Agency in Mobile. He founded Smart Home Alabama, which advocates the Fortified program developed by the nonprofit Institute for Business and Home Safety. That group, funded by the insurance industry, advocates for stronger construction in both new and existing homes. Its standards, when met, will often qualify a home or business for discounts from property insurers.

Read more on fortified construction here

Posted 3/17/2012

Alabama among weakest of hurricane-prone states
in building code study

From MPR's George Altman post 3/5/2012

Alabama’s building standards and enforcement practices are among the weakest of all the hurricane-prone states in the U.S., an insurance industry study concluded.  The state ranked 15th among 18 states near the Gulf of Mexico and the Atlantic Ocean in a study by the Insurance Institute for Business & Home Safety.

Alabama "has no statewide residential code and no enforcement requirements for the select codes that do exist," the study said. "Because there are no statewide code requirements, there is no state program for certification of building inspectors."   A few of Alabama’s 67 counties have implemented their own building codes. Baldwin County, for example, requires that properties be built to withstand winds of 140 mph.

Statewide codes set minimum standards for how structures are built. Building properties to meet such standards -- and hiring inspectors to make sure the properties are being built to code -- comes with a cost. But by reducing storm damage, codes can also save lives, protect property and keep insurance coverage less expensive and more widely available.

Building standards are particularly important for people who live in coastal areas that experience hurricanes.  "It’s a huge and crucial part of any package of solutions that we need to consider" to address the availability and affordability of insurance in Mobile and Baldwin counties, said Sen. Ben Brooks, a Mobile Republican.  Brooks added that state government must make several additional regulatory overhauls to address coastal insurance woes.

Problems with the availability and price of insurance has been of most concern in coastal areas to this point.  But the tornadoes that devastated parts of central and north Alabama last year could change that.  Alabama residents in tornado-ravaged areas soon may see their insurance rates rise and companies deny them coverage, according to Rep. Steve McMillan, R-Gulf Shores.  "I’ve heard that, within a year, they’re probably going to be on equal footing with us" on the coast, McMillan said.

Read complete article

Posted 3/6/2012

Can you say your community is resilient?

"It starts with do you have and do you enforce codes that minimize the risks and hazards a community faces," Federal Emergency Management Agency Administrator W. Craig Fugate told attendees of ICC's 2011 Annual Conference in Phoenix. The keynote speaker of the Annual Banquet discussed the importance of adopting and enforcing safe and sustainable building codes to make communities more resilient to natural disasters.

This video clip was recommended to HHII by Disaster-Smart Inspection Consulting as showing 'great perception of the issues facing US at risk communities and right on target for providing a permanent solution to the Coastal Insurance Crisis. This is exactly what Smart Home Alabama, the Insurance Industry, Non-profit Consumer Groups, Academic Research Centers, Public Policy Experts, and Industry Experts have been working to implement over the last 15 years.'

You will see the speaker is a strong advocate for mitigation.  HHII agrees mitigation is a worthy goal but mitigation will NOT provide a timely solution to the affordability problem highlighted in the story below nor will it bring clarity to the question of whether the insurance rates charged coastal county residents are fair and equitable

Posted 12/7/2011

High standards could have protected homes, residents
(MPR editorial)

A NEW study, conducted in part by University of Alabama engineers, reinforces the need for the state to consider stronger construction methods to protect people and property from storms.

A research team analyzed 150 homes that lay in the path of the tornado that ravaged Tuscaloosa on April 27. They found that many wood-frame structures on the fringes of the storm could have avoided catastrophic damage with simple additions — in some cases, metal clips or straps that cost about $1 each.

How many lives could have been saved had construction been just a tad stronger? The researchers noted, though, that nothing could have protected what that lay in the direct path of the EF4 that skirted the UA campus with winds up to 190 mph. The work was funded by a grant from the National Science Foundation.

The study is timely because of a special legislative session on homeowners insurance that Gov. Robert Bentley is expected to convene this fall. Homeowners in the coastal counties — and to the north, since the tornadoes — have found it increasingly difficult to obtain affordable insurance for their property. In one fell swoop, for instance, Alfa non-renewed some 73,000 policies in north Alabama after the tornadoes.

One way to reduce the cost of premiums is to reduce the risk of damage. And one way to do that is to strengthen construction standards and ramp up building code enforcement statewide.

These issues deserve the immediate attention of Gov. Bentley’s newly formed Affordable Homeowners Insurance Commission, which is charged with seeking solutions to the insurance crisis and reporting to the governor before the session.

Legislators recognized the need for better construction when they approved premium discounts and other incentives for homeowners who retrofit their houses. But Alabama can do much more.

The study found, for instance, that basic changes such as wind-rated shingles, more anchors for porch columns and high-quality vinyl siding could have helped many homes in Tuscaloosa survive the tornado. Now, the homes that were destroyed will need to be rebuilt — an expensive proposition that makes it difficult for the community to rebound.

Meanwhile, homeowners in the coastal counties cross their fingers as they watch the tropics brew. The region is still recovering from the BP oil spill, and it certainly doesn’t need a hurricane to follow on the heels of the spill.

Yet Alabama doesn’t have to feel helpless. There are steps the state’s leaders can take to protect people and property, and make them more resilient in the face of disaster. These should include smarter building methods that — as the new study confirms — do not have to be elaborate or expensive.

Posted 8/2/2011

Fortified homes can save homeowners money

Kathy Jumper, Press-Register, June 5, 2011 - Read original article

 

DAPHNE, Alabama - Jeffrey and Alicia Duncan will save an estimated $1,600 a year on insurance costs after their Daphne home is retrofitted to be safer and stronger in storm winds.

That's good news for the couple, who said they had paid $2,700 a year to protect their 2,100-square-foot home in Lake Forest before their insurer dropped them earlier this year as part of a larger withdrawal from the coastal market.

They found replacement coverage for $3,700 a year after consulting with the nonprofit Smart Home Alabama. They also got a bonus -- an offer to make their home more storm-resistant at no charge.

With a grant from State Farm and donations of time and product from local engineers, builders and vendors, Smart Home Alabama will upgrade three local homes starting this month.

 Posted 6/7/2011

The ethical problem with the Fortification Funding Act

HHII welcomes passage of the Strengthen Alabama Homes Fund Act.  The fund aims to pay all the costs of storm-proofing a typical home with oversight provided by the Department of Insurance for approval of the grants and how much assistance a homeowner can receive.  It is expected that the fund would likely cover the $7,000 to $12,000 cost of a typical home’s hurricane retrofitting.  Homeowners needing to pay for more expensive retrofitting procedures could have to cover some expenses out of pocket.  The fund is linked to a law passed in 2009 that requires insurers to lower premiums for residents of Mobile and Baldwin counties who build or modify their homes to meet particular storm-proofing standards.  Using the two programs in concert, a homeowner could end up with lower premiums and a more resilient house, all without having to dip into a savings account. 

The fund will be created as soon as the governor signs the bill into law. But until it has a source of revenue, homeowners will not be able to receive retrofitting assistance.  Clean Water Act fines arising from the Gulf oil spill could provide a substantial amount of money to the fund.  But Congress has yet to agree on any plan to spend that money, which could total between $5.4 billion and $21.1 billion, to Gulf Coast states.

However, there's a timeline problem and a fundamental ethics problem with its retrofitting fund approach.  Neither kills the idea but it would be nice if work was done to remove both problems, especially the ethical blemish.

Timeline:
50,000 structures in need of retrofitting grants (Mobile/ Baldwin structures times the poverty percentage for our area) X $7,500 minimum retrofitting cost = $375 million divided by $20 million/ year = about 19 years to harden the coast.  Probably longer.  This assumes an infusion of $20 million/year in the new fund and that all the rest of us non-poverty people are going to retrofit their structures on their own dimes.  It also assumes the $7,500 price tag is accurate.  Each wrong assumption lengthens the amount of time before we harden the coast.  Even so, even if we can only get 5 houses a year done and it's going to take 200 years, lets start moving in that direction. Fortification is a good idea.

Ethical problem:
All people will pay to retrofit other people's houses. Insurance companies will lower rates for those people who's houses are retrofitted (we're told), but they will leave unadjusted (in fact, they'll probably increase) the price of insurance for those who aren't immediately retrofitted.  People are going to pay the high insurance rates (BP money, like tax money, belongs to everyone), perhaps even get penalized, plus pay, to lower the rates for others.  This warped Devil's Way derives from the warped Devil's Way foundations of the modern insurance company.  It can be fixed, but one must go into the ethics of the insurance cosmos and require company's to behave justly.

HHII opinion posted 5/7/2011

Fortified Construction

For more information regarding fortified buildings check WindMitigation.com

Posted 11/10/2010

Smart Home Alabama

Smart Home Alabama was prompted by the desire to alleviate the suffering that resulted from the collapse of the residential insurance market on the Gulf Coast following Ivan and Katrina through education, facilitation, collaboration and partnership.

Learn more at www.smarthomealabama.org

Posted 11/14/2010

IBHS

The Institute for Business & Home Safety’s mission is to reduce the social and economic effects of natural disasters and other property losses by conducting research and advocating improved construction, maintenance and preparation practices.

View video at www.disastersafety.org/videos

PPosted 11/14/2010

BCEGS

The Building Code Effectiveness Grading Schedule assesses the building codes in effect in a particular community and how the community enforces its building codes, with special emphasis on mitigation of losses from natural hazards.

Learn more at www.isomitigation.com/bcegs

Posted 11/14/2010

Alabama Weighs Grants for Wind-Proofing, Creation of Insurance Research Center

From 2/15/2013 article by Philip Rawls in Insurance Journal

Some of the money that Alabama receives from BP over the Gulf oil spill could end up helping coastal residents make their homes more resistant to wind damage from hurricanes. That is one of the recommendations from a commission that Gov. Robert Bentley appointed to study the availability and rising cost of homeowners insurance.

Bentley received the recommendations Wednesday and said that is one recommendation he wants to implement quickly.

The Affordable Homeowners Insurance Committee proposed setting aside $100 million. Bentley said he hasn’t decided on an amount, but he wants to use BP money to award grants to residents of Alabama’s two coastal counties, Baldwin and Mobile, who can’t afford to make their homes safer. Commission Chairman Tim Russell, the probate judge of Baldwin County, said making a typical 2,000-square-foot home more resistant to high winds costs $5,000 to $7,000. He said it includes installing tougher roofing, tying rafters to ceiling joists, and improvements to doors and window. He said people who make the improvements can already get discounts of up to 35 percent on the part of their homeowners insurance that covers wind damage.

Bentley said he would also move to implement the commission’s recommendation to create an Alabama Center for Insurance Information and Research at a state university. It would develop innovative approaches to solving insurance problems.

A group representing homeowners in Baldwin and Mobile counties, the Homeowners Hurricane Insurance Initiative, said the recommendations won’t fix the problem of getting affordable homeowners insurance, and more work needs to be done.

“My door remains open to them,” Bentley said.

Read complete article here

Posted 2/16/2013

Funding sources for Home Fortification

Storm Smart Coasts

FL ways to finance mitigation

FEMA State Hazard Mitigation Officers
The Federal Emergency Management Ageny's (FEMAs) Mitigation Grant Programs are provided to eligible Applicant States that, in turn, provide sub-grants to local governments. The Applicant selects and prioritizes applications developed and submitted to them by local jurisdictions to submit to FEMA for grant funds. Prospective Sub-applicants should consult the official designated point of contact for their Applicant State for further information regarding specific program and application requirements.

FEMA rejects Alabama request for help with January tornado costs
But perhaps you should read this first.

Posted 7/30/2012

Are you getting the insurance premium discounts you deserve?

By George Altman, Capital Bureau
Read original 3/31/2012 article at al.com

A state law passed in 2009 requires that insurance companies discount the premiums of homes in Mobile and Baldwin counties that are built or retrofitted to meet building code standards. Yet many property owners and building inspectors have expressed doubt that the discounts are being properly applied. Renee Carter, state director of the Alabama Insurance Information Service, said that homeowners should take a series of steps to make sure that they are eligible for, and receive, the discounts.

Mobile and Baldwin property owners can use the information below — which comes from Carter’s insurance industry group, the state Department of Insurance and the Alabama Legislative Information System Online — to try to get lower premiums.

What building codes should I follow for a new home? To receive the discount, state law requires that new homes be built to the 2006 International Residential Code or to the Fortified for Safer Living standards from the Institute for Business and Home Safety, or IBHS.

What building codes should I follow to retrofit an existing home? Generally, existing homes must be retrofitted to meet one of the three levels of the IBHS Fortified for Existing Homes standards in order to qualify for the discount. Other building standards may also qualify for the discount if approved by the state insurance commissioner.

How do I certify that my house is built to code? After the property meets applicable code requirements, owners must get certification that the home is up to code before they can get a discount. Code evaluators can be found online: www.disastersafety.org/page?pageId=feh_evaluators

What should I do if my home is certified, but I don’t think I’m getting the discount? Talk to your insurance agent if you doubt that the discount is being applied. If the agent is unable to help, try contacting your insurance company.

What if my company still isn’t giving me the discount I should be getting? Contact the Alabama Department of Insurance if you believe your insurer is violating state law by not discounting the premiums for your code-compliant home. The department’s main number is 334-269-3550.

Can I get a better deal with another company? State law requires minimum premium discounts for homes built to code, but insurance companies may offer larger discounts. Shop around if your premium has been discounted but you think it should be lower.

In what cases might the premium discount requirement not apply? The premium discount mandate only applies in Mobile and Baldwin counties. Additionally, the state insurance department only regulates admitted insurance companies, so it may not be able to help if a non-admitted, or surplus-lines, carrier refuses to offer the discount.

Posted 4/10/2012

Inspectors doubt insurers discount premiums
for houses built to code

From post by George Altman, MPR Capital Bureau

Building codes are common, but hardly uniform, in Mobile County and its municipalities. Local governments use different versions of the International Residential Code, or IRC, have different ways of determining what wind speeds structures should be able to withstand and express different opinions about the building code issue.

But there is broad consensus on at least one point: "Even though the codes increase, the (requirements for) wind speeds increase, the insurance rates have not gone down," said Frank Lott, an associate with Heritage Homes in Mobile. With rare exception, building inspectors for Mobile County and the municipalities therein told the Press-Register that they are frustrated with the size and duration of premium discounts given to properties that are built to code.

Renee Carter, state director for the Alabama Insurance Information Service, an insurance industry group, said she’s heard nothing of the sort. "From an industry perspective, we have not received complaints that people are not receiving the discount," Carter said. And applying such discounts isn’t merely a favor insurance companies can choose to do for owners of properties built to code, she added. Since 2009, it’s state law. "If there’s an issue, then we definitely want to know about it," she said.

Building codes set standards for how properties are built. They can help homes withstand storms such as hurricanes and also avoid plumbing, electrical and other problems. In hurricane-prone south Alabama, insurance companies and government officials alike have pushed for more storm-resistant homes. A bill from Sen. Ben Brooks, R-Mobile, passed into law three years ago, required insurers to discount the premiums of properties built or retrofitted to the 2006 International Residential Code.

Mobile County, Creola, Dauphin Island, Satsuma and Semmes all mandate the 2006 code for new housing, their building inspectors said. The city of Mobile requires the 2009 version, according to Roger Bendolph, deputy director of code administration for the city. Bendolph expressed understanding for possible reluctance by insurance companies to lower premiums for properties built to code. "The insurance industry is in business to make money," he said, adding that companies can’t be sure how effective the codes are until a major storm tests them.

His counterparts from other cities strongly disagreed. "The homeowner’s not going to get a fair shake," said Dauphin Island Building Inspector Corey Moore. Satsuma City Inspector Tom Briand said he’s heard for years that insurance companies would discount premiums for homes built to IRC standards, but he hasn’t seen it happen. "I’d like to see proof that insurance companies are actually giving discounts," he said.

For Briand, "the big question at hand" is what wind speeds should be mandated. Figures from Mobile County call for Satsuma homes to be built to withstand 126 mph winds, Briand said, but he thinks that number is too high and doesn’t apply it to Satsuma properties. "I question the numbers, and I would just love to know where they get this information from," he said. Mobile County Engineer Joe Ruffer said the wind speed estimates came from national groups with considerable expertise. Two separate models came up with similar numbers, he added.

Ruffer said the county has no immediate plans to switch to the latest, 2012 IRC standards. These are actually less stringent than the 2006 version, he said. "Everybody thinks the 2012 code is better and safer," he said. "It’s actually less construction. People don’t understand that." Ruffer added that he’d like to see greater uniformity of building codes in Mobile County. Such regulations aren’t just a matter of protecting property and lowering insurance rates, he said. "We’re talking about people’s lives."

Posted 3/25/2012 (Hat tip to Stan Virden)

Build safer, stronger on Gulf Coast

Mobile Press Register 2/16/2012 editorial

PLENTY OF people agree that Alabama's homeowners insurance market is out of kilter. But a difference of opinion on how to recalibrate it could drown out reform efforts before they make progress in the Legislature.

Supporters of a so-called "clarity bill," which would require insurers to publicly disclose more detailed information on policies, are focused on the data. But the group, known as the Homeowners Hurricane Insurance Initiative, is missing an opportunity to push for something much, much better: a tangible way to reel in premiums.

The most tried-and-true method is mitigation. In Baldwin and Mobile counties as well as on the Mississippi Gulf Coast, the need for stronger construction, in order to lower the risk of damage, is gaining traction. Even the Property Casualty Insurers Association of America, a trade group, agrees that mitigation can improve competition and bring down the cost for homeowners.

The "clarity" supporters, though, have reservations about that approach. A spokesman said recently he doubts insurers would lower premiums for buildings that are more storm-resistant.

Real-life examples, however, say otherwise.

In Mississippi, developer Joe Cloyd told a group of business leaders in Pascagoula this week that he has seen a 45 percent decrease in insurance premiums on a neighborhood of sturdier cottages he built in Ocean Springs. Storm-resistant homes cost a little more to construct, he said, but the extra expense pays for itself.

That sentiment was echoed by Mark Cumbest, a member of the Mississippi Windstorm Underwriting Association (the Magnolia State's insurer of last resort for coastal property owners). When his group travels to meet with major players in the reinsurance market in London and Bermuda, he said, the conversation inevitably turns to the status of building codes along the Gulf Coast. "It's so critical," Mr. Cumbest said.

Baldwin County commissioners also recognize the connection between stronger construction and righting the market. Recently, they adopted updated international building codes for the county, specifically to produce savings for homeowners. Baldwin building official Mike Howell said updated guidelines for the county may increase construction costs, but not much compared with the potential savings in damage claims and premiums.

There are many pieces of the puzzle that need to be examined as Alabama attempts to improve the homeowners insurance market. Experience elsewhere argues that mitigation needs to be a big part of the solution.

Posted 2/17/2012

Helping Baldwin County homeowners help themselves

1/18/2012 MPR article by Jane Nicholes

Baldwin County homeowners could finally get some relief from high hurricane deductibles under a proposal from legislators and local members of the Affordable Homeowners Insurance Commission. The group proposes to create a countywide insurance authority that would help cover wind deductibles for homeowners. The plan could also lead to lower premiums on homeowners’ policies.

“It’s going to be up to us to find a solution to the insurance problems we have here,” state Rep. Joe Faust, R-Fairhope, said Tuesday during an Eastern Shore Chamber of Commerce legislative briefing.

Probate Judge Tim Russell, who chairs the homeowners commission, said later Tuesday that the county authority is not a formal proposal of the commission but an initiative involving legislators and local members of the panel, who include Faust. According to Russell, this is how it would work:

• The authority would be created by the Legislature through a local bill. It would, supporters hope, get initial funding from the distribution of BP fines for the Deepwater Horizon oil spill. The Baldwin County Commission has requested some $575 million for several projects.

• The authority would have the power to issue so-called “cat bonds,” which are bonds issued to cover catastrophic events such as hurricanes. Russell said cat bonds are sold worldwide, so there is not one buyer or one group holding all of them.

• Homeowner insurance deductibles generally are 5 percent of the value of a home. On a $100,000 home, 5 percent would be $5,000. But the minimum deductible would be $15,000 for assistance from the authority, Russell said.

• Homeowners could buy a separate policy through the insurance authority to cover the deductible. Or, they could apply for a loan after a wind disaster to cover their losses up to the amount of the deductible. And people with low incomes could be eligible for grants to cover the deductible.

• Because a major hurricane brings on a large number of relatively smaller claims in addition to large-scale damage, insurance companies should be able to reduce premiums because of the larger deductibles. “It takes a lot of their catastrophic exposure away,” Russell said.

• The authority would not be able to take on all of the homeowners in Baldwin County immediately, but would use actuarial studies to ensure that it could cover any claims. The authority would also serve as a model for other Alabama counties to adopt.

Faust said homeowners’ premiums could be lowered by as much as 35 percent.

Implementation depends on Congress awarding enough BP fine money so the County Commission can fulfill its “wish list” of projects. It also depends on local support, Faust said.

Russell said that it’s possible to get the necessary bill passed in the upcoming session. “I think it’s going to gain a lot of support,” he said.

Both Faust and Russell said Tuesday that the special session discussed by Gov. Robert Bentley for insurance matters is unlikely to take place anytime soon. Faust said he doesn’t think there will be a special session. Russell said that while a special session has not been ruled out, he thinks the legislation necessary for the authority could be handled in the regular session.

Orange Beach Mayor Tony Kennon said the proposal made sense to him because the coastal insurance crisis holds back economic development and full recovery from the oil spill. “There’s no better use of that BP fine money than to solve the wind insurance problem,” Kennon said.

Faust said the affordable insurance commission has found that those parts of northern Alabama not affected by the April tornadoes continue to be indifferent to the crisis on the coast and its impact on the statewide economy through the loss of revenue from the tourism industry. The insurance authority approach lets counties take care of themselves. “If there is a silver bullet, this is it,” Faust said.

 Posted 1/19/2012

Baldwin leads by adopting new plan

Mobile Press Register Editorial (1/18/2011)

THE BALDWIN County Commission is boldly leading the way on homeowners insurance reform, and the rest of Alabama should take notice. Commissioners this week voted unanimously to adopt updated international building codes, which can strengthen homes, increase competition among insurers and eventually help lower premiums for consumers.

In addition, Baldwin municipalities signed on to the higher standards, signaling that they, along with the commissioners, understand the significance of the insurance crisis and are willing to enact real reforms that can right the market.

The governor's Affordable Homeowners Insurance Commission can be credited with raising the level of conversation concerning homeowners insurance. It has held a number of listening forums statewide, which has spotlighted the need for reform.

The new code in Baldwin requires, for instance, that roofs be sealed at the time of construction or replacement. Homeowners will have to pay a small inspection fee, but in return they will get proof that their home has been upgraded. This can result in insurer discounts and lower premiums.

Indeed, implementing higher building standards can go a long way toward lowering the risk of property damage. This is a far better, and less expensive, approach than empowering governments to bail out communities after a hurricane or some other catastrophe hits.

Building stronger not only prevents damage, but by lowering the risk, it can attract more insurance companies to do business in the area. The ensuing competition, along with homeowner discounts, can result in much-needed savings. The Property Casualty Insurers Association of America, a trade organization, has even called for steps to improve competition and reduce rates.

Coastal Alabamians could certainly use a break on the premiums they pay. This past August, homeowners from the two-county area voiced anger and frustration at a forum held at the Mobile Convention Center. Many of them said they were at a breaking point financially because of policy cancellations, rising premiums and the inability to cover deductibles. Addressing such concerns can go along way toward making communities across the Gulf Coast more resilient.

There have been other proposed reforms, too. One suggestion is to create a countywide insurance authority to help homeowners meet their wind deductibles. Also, the local legislative delegation is expected to roll out a list of reforms by the start of the regular session in February. Baldwin County's action this week is just a single piece of the reform puzzle, as one commissioner pointed out, but it's a big one that deserves a round of applause.

Posted 1/19/2012

Retrofit tax deduction won’t be enough

I am puzzled by the Press-Register’s May 29 editorial ("Insurance has to be a statewide issue now"), which says insurance premiums would be reduced by Alabama tax deductions for those who build or retrofit their homes to resist tornadoes and hurricanes.

The editorial is parroting an insurance industry argument: Stronger homes will reduce insurance rates. It is a false argument based on a badly flawed premise: People can afford to retrofit. For example, this "solution" won’t help the elderly.

Almost 20 percent of Alabama residents are older than 65, and nearly 30 percent of coastal Alabama residents are 65 or older. The Kaiser Family Foundation has stated that median income for U.S. Medicare recipients is $21,000; median retirement savings is $2,000; median home equity is $60,000. Does this sound like a group who can afford to retrofit their homes?

Also, Alabama already gives a deduction for the extreme medical costs that most elderly suffer. This deduction, thankfully, virtually eliminates state income tax for most elderly faced with horrendous medical expenses at the end of life. Another tax deduction does nothing for this group.

Few elderly people can afford to build or retrofit their homes to upgraded building standards to hopefully obtain a relatively small reduction on annual premiums of more than $3,000 and deductibles of 5 percent of the home value. Do the math for your home.

The insurance industry will try to define the home insurance cost problem as homeowners with weak homes.

CRAIG SKAGGS

Posted 6/7/2011

State Senate approves hurricane retrofitting fund

The state Senate approved a bill Wednesday to create a fund that could accept oil spill fines, federal grants and money from other sources and give those dollars to homeowners seeking to retrofit their property to better withstand hurricanes.

The proposal does not allocate money from any particular sources to help homeowners with retrofitting costs. It only creates a place to hold money for this purpose, should dollars become available later.

Read complete 4/28/2011 article at Al.com

Posted 4/28/2011

Insurance Discount for Fortified Buildings Makes Progress

HHII has not been pushing this legislation because it does not offer immediate premium reductions or coverage guarantees for existing homes.

Several admitted carriers will be increasing the Fortified credits to as high as 50%. Two admitted carriers are willing to insure new clients that meet the Fortified standards. One major carrier is offering the Fortified program nationwide, and is crediting Alabama as the first state to endorse IBHS Fortified for Existing Homes program. One non-admitted carrier will be issuing wind and hail only policy that will compete with AIUA starting May 10th. Have a new A rated carrier (Non-Admitted) entering the state next week. They are willing to insure several thousand new policies. Mobile Bay will not be an issue. They require detailed inspection but will give credits for Fortified homes even though they are not required. More carriers looking to enter market with the passage of seasoning bill. Fortified Habitat Open House is scheduled for May 27th., 2010

To find more information concerning insurance discounts applicable to fortified buildings and how to apply, go to the undernoted links.
Requirements to qualify as fortified home

Alabama insurance discount benchmarks

Application Form

Originally posted 5/2010; Revised & reposted 11/10/2010

This page last updated 11/28/2014