A new independent research study about the effect of Insurance Institute for Business & Home Safety (IBHS) Fortified Home designations on home values in Mobile and Baldwin counties in Alabama found that switching from a conventional construction standard to a Fortified designation increases the value of a home by nearly seven percent.

The additional cost of building or retrofitting is frequently less than seven percent of a home’s value. This is without considering other direct benefits such as insurance premium discounts, potential uninsured rebuilding costs, and the inconvenience of temporary housing following a disaster. Because the statistical results were so strong, IBHS urges appraisers and financial institutions to reflect Fortified designations in mortgage appraisals.

“This report is a great example of the practical application of academic research methods. We are very confident in the results and hope they will affect public and private behavior to make exposed communities more resilient to natural disasters,” said Lawrence S. Powell, director of ACIIR.

The IBHS Fortified voluntary standard uses an incremental approach toward making existing homes more resistant to damage from hurricanes, tropical storms, hailstorms, high winds and wind-driven rain associated with thunderstorms. The Silver level of the standard addresses doors and windows.

Property-loss mitigation was the theme of one panel during Wednesday’s White House Forum on Smart Finance for Disaster Resilience, which included the Insurance Institute for Business & Home Safety (IBHS).

Debra Ballen, IBHS general counsel and senior vice president, public policy, said strong, well-enforced building codes are a good start, but codes are limited because they overwhelmingly apply only to new construction. Meanwhile, the resilience of millions of existing structures must be improved. She also noted that about a dozen states do not currently have statewide codes in place, and many locations with codes do not enforce them effectively.

Because of that, “IBHS developed the voluntary, market-based Fortified Home program, which is a set of engineering and building standards designed to help strengthen new and existing homes through upgrades to minimum code requirements that can reduce damage from specific natural hazards,” explained Ballen.

She said the recent study from Alabama “is more tangible evidence that Fortified homes are not only better able to resist disasters, they also are being valued higher in the marketplace.”


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