Officials at the Insurance Institute for Business and Home Safety say the wake of destruction left by hurricanes, wildfires and other natural disasters can be greatly reduced with construction choices that cost little extra upfront.
RICHBURG, S.C. (AP) The insurance industry hopes a 21,000-sq.-ft. lab in rural South Carolina can help revolutionize the way homes are built and stem the cost of Mother Nature's disasters.
Officials at the Insurance Institute for Business and Home Safety say the wake of destruction left by hurricanes, wildfires and other natural disasters can be greatly reduced with construction choices that cost little extra upfront. They hope research at the facility persuades people to make those choices, ultimately saving lives and money.
In 2012, there were 11 billion-dollar-plus disasters nationwide, according to the National Climatic Data Center. They caused more than $110 billion total in damages and 377 deaths — for the second-costliest year on record, with Sandy alone accounting for $65 billion.
The price tags are not sustainable, yet people continue to build and rebuild without the next disaster in mind, IBHS president Julie Rochman said.
“We cannot continue this cycle of destruction. We've got to learn from the loss of life and the huge amounts of federal spending and private sector spending,'' she said. “We can break these cycles. We know what to do. It's simply a matter of will to do so.''
Since the facility opened in fall 2010, it has simulated hurricane winds, hail storms and wildfire ember showers to scientifically test the effects of different construction and landscaping methods on full-size model homes — and provide the public a visible comparison.
The six-story-tall test chamber can generate winds of up to 130 mph and rainfall equal to 8 in. per hour.
Officials hope the Chester County facility drives market changes in construction practices, much as the Insurance Institute for Highway Safety did for vehicles.
On Nov. 12, four Republican congressmen visiting the facility watched a wildfire demonstration and participated in a round-table discussion with industry and fire safety leaders on how to turn the institute's research into common practice.
“These natural disasters seem to be getting bigger. The damage certainly is much larger,'' said Rep. Bill Shuster, R-Pa., chairman of the House Transportation and Infrastructure Committee, which handles disaster management. “Whether it's Sandy or Katrina, it's important that we're being smarter about how we're building things and the mitigation costs. What we can learn from this type of facility is extremely important.''
Some of the lessons cost little to no money. U.S. Rep. Mick Mulvaney, whose district includes the facility, said the wildfire demonstration emphasized the need to clean his gutters of pine straw.
Research has led to three additions in the 2015 International Residential Code — the first update since its opening — all relating to sealing roofs to keep water out, whether from a thunderstorm or a hurricane. The recommendations add less than $500 to a reroofing job, Rochman said.
An idea as basic as sealing the seams of a roof deck before adding shingles can make a huge difference in insurance claims, said Eric Nelson, a vice president of Travelers Insurance and IBHS board member.
Officials say model building codes are critical for stemming the damage of a natural disaster. But their use is not uniform. While international building codes are used in all 50 states, several don't mandate them on a statewide level, while others still use versions a decade or so old, according to the International Code Council. Another problem is lax enforcement, Rochman said.
The institute is part of BuildStrong, a coalition of insurers, fire safety and trade groups advocating for an incentive bill introduced in May. The House bill provides more disaster relief from the Federal Emergency Management Administration to states that adopt and enforce the ICC codes. Ten states and the District of Columbia would immediately qualify for the additional 4 percent, including South Carolina, which enforces 2012 codes statewide. Thirteen other states would qualify after making minor changes, according to the institute. The bill remains in the committee process.
The institute also has created its own, higher standards in its “Fortified'' homes program. Homeowners can aim for one of three safety-level designations — bronze, silver or gold — depending on how much they're willing to spend.
“The benefit of the research is to build strong, safer homes and buildings,'' Nelson said. “There will be no resilience that will stop a Category 5 hurricane, but we see in our own loss data a lot of claims from low wind speeds, tropical storms, Category 1 hurricanes — those are items that can be mitigated.''
Insurers can reduce their prices if there's less overall risk of disaster claims, Nelson said.
But industry officials say a widespread change of habits will require education coupled with a variety of incentives.
South Carolina coastal builder Bruce Carrell said a “fortified'' home costs about 5 percent more to build, with most of that paying for impact-resistant windows and doors. Despite the obvious advantages of fortifying a home on the Grand Strand, Carrell said, he has almost zero success of selling the concept for homes under $400,000.
“It's harder for them to commit the extra dollars for something more intangible. If they can get a nicer countertop or impact windows, they'll probably buy the nicer countertop,'' said Carrell, of The Carrell Group.
Comparatively, half of his customers buying homes between $400,000 and $600,000 elect to spend the extra 5 percent, while 80 percent of customers buying homes above that price do, he said.
He would have more success, he said, if he could point buyers to a combination of insurance discounts and tax breaks.
On that front, Travelers Insurance is piloting in four states a discount of up to 20 percent on hurricane insurance premiums for homes deemed fortified, Nelson said.
“That's putting together the dollars and cents for consumers,'' he said. “But it's not all about price. Who wants to live through a big disaster where all your precious mementos are destroyed? We want to help teach consumers how to mitigate and avoid that loss to begin with.''