A red state pioneers paying for roof upgrades as storms boost insurance costs

“This program is part of our pitch to insurance companies that Louisiana is serious about resiliency,” said John Ford, deputy commissioner of the public affairs division of the Louisiana Department of Insurance.

The legislature set aside $30 million last year in the program’s first round of funding, and lawmakers put in another $15 million this year. In total, state officials say that should cover about 4,500 roofs. The agency has issued 900 grants so far.

This year, Louisiana lawmakers passed a measure that will task state regulators with calculating the insurance discounts that Fortified homeowners should receive.

Inland areas join the effort

While hurricanes on the coast have gotten more attention, Midwestern states have been hit with severe hailstorms, windstorms and tornadoes that have driven up insurance costs. Minnesota lawmakers established a home resilience grant program last year to deal with the crisis.

“Prevention is a lot cheaper than actually paying for storm damage,” said Julia Dreier, deputy commissioner for the Insurance Division of Minnesota’s Commerce Department. “The hope is that we can prevent the need for insurance payouts.”

Agency officials are still setting up the program, which has not yet issued grants. Regulators expect the funding for the initial round of grants to be included in next year’s state budget. But insurance companies have already begun planning to offer discounts to residents who upgrade their roofs.

In Oklahoma, a state that already ranks among the most expensive for home insurance, more than 100 tornadoes have touched down this year. Earlier this year, lawmakers enacted a grant program for Fortified homes similar to the ones other states have adopted.

“We are hoping to see a lot of the same great results that Alabama has seen — not only homeowners seeing premium discounts, but over time lower claim exposure [for insurers],” said Ashley Scott, government and community affairs director with the Oklahoma Insurance Department.

Once it’s up and running, state leaders expect the program to offer about $10 million a year in grants. The agency expects to start issuing funds next year.

Meanwhile, lawmakers in Kentucky and South Carolina have established similar programs, also administered by state insurance regulators. And Mississippi set aside $5 million for a program to help residents shore up their homes, including roof upgrades.

The Insurance Institute for Business & Home Safety, which created the Fortified standard, expects to see a boom in resilient roof construction as more states promote such upgrades.

“We can’t do a lot in the short term about rising risk from severe weather,” said Newman, the group’s general counsel. “But this particular home can be made more durable, can be made more resilient.”