FORTIFIED and Building Codes Case Study
Building for Insurability, Resilience, Energy Efficiency, and Housing Affordability: Addressing the True Cost of Housing
Alabama bolstered its insurance industry and improved family safety by reducing extreme wind and hurricane risks through better coastal building codes and FORTIFIED roof incentives. FORTIFIED is an Insurance for Business and Home Safety (IBHS) program for new and existing homes that is proven to prevent damage from hurricanes, high winds, hail, and severe thunderstorms by making homes stronger and stopping water intrusion at the roof. Data from the Alabama Department of Insurance is showing this approach works – of the 40,000 claims from coastal communities hit by Hurricane Sally (2020), FORTIFIED and building codes dramatically reduced losses and claims severity. In Alabama, homeowners of new and existing homes with FORTIFIED roofs may be eligible for insurance discounts of 20-55% off the wind portion of their property insurance. Strengthen Alabama Homes provides $10,000 in grants for Mobile or Baldwin Counties for FORTIFIED roofs or for performing other updates. Alabama also provides households a tax deduction of up to $3,000 or 50% of the cost of the work (whichever is less) when retrofitting their homes or businesses to reduce wind or flood damage. Households can also deduct deposits into catastrophe savings accounts. Public investment has catalyzed the private sector—almost 85% of FORTIFIED roofs today receive no public support in Alabama. Incentives for FORTIFIED and building codes are available in other states, too. For example, the Federal Reserve Bank of Dallas provides grants through CDFIs for FORTIFIED for up to $15,000 per existing home and up to $7,500 per newly constructed home. Because they serve states with severe weather (LA, MS, NM, TX), the Federal Reserve Bank of Dallas has seen homes in its portfolio get hit by disasters again and again. They now prioritize housing survivability and insurability as core mission elements.