As the Alabama coast observes the quiet passage of another hurricane season, more homes are being built to better withstand the Next Big One.
At last count, 2,635 homes in Alabama now meet the standard of “fortified,” the designation of an Insurance Institute for Business and Home Safety program that establishes storm-resistant construction standards. Alabama has by far the largest number of fortified homes in the country, making up 70 percent of the total. The top seven cities, led by Fairhope, are in Baldwin and Mobile counties.
Fairhope is No. 1 with 542 total fortified homes. Daphne ranks second with 401, followed by Mobile, Foley, Gulf Shores, Spanish Fort and Semmes.
The sizable homeowners and commercial insurance discounts mandated by the state for fortified homes and buildings act as an incentive to spend extra money. A nonprofit organization based in Mobile promotes the standards and stronger building codes in general. The ultimate test — a major hurricane — has not occurred since Katrina in 2005, but the growing number of stronger homes being built along the Gulf Coast suggests the concept is gaining popularity.
Mississippi is second to Alabama in state rankings, while Florida, North Carolina and South Carolina have fewer than 200 homes each, according to Graham Green, marketing director of Smart Home America.
Fairhope’s building code is so close to the fortified home standards that only a couple of extra steps are needed to get the certification, said Erik Cortinas, the city’s building official. The homeowners insurance discounts are big enough to encourage buyers to seek out fortified homes, which in turn leads builders to provide them.
“This is the first time there’s ever been a payoff,” Cortinas said. For example, he recently encountered a new homeowner who was quoted a premium of $3,400. But when the home was finished and certified as a fortified home, the final premium was $1,100.
“It’s kind of created almost a need for the local homebuilders to build a fortified home,” Cortinas said.
Single-family residences, duplexes and triplexes are eligible to participate. For homes built in hurricane country, the fortified standards focus on the roof and include how it is sealed, the type of covering, the attic ventilation and the size and type of gables. Doors, windows and other openings must meet impact protection standards, and porches and carports must be attached and anchored to resist uplift. Chimneys and the overall connections, such as walls to floors, also must meet standards.
Homes may be awarded gold, silver or bronze designations. Silver and bronze qualifications more frequently apply to renovations of existing homes and especially to new roofs, Cortinas said.
Discounts can range from 20 percent to more than half the cost of a hurricane premium, with the lower discounts applying to renovated homes and the higher discounts applying to new construction. The certification is good for five years before a new inspection is required.
Giving homeowners legislated incentives to make homes better able to withstand hurricanes was a strategy that grew out of hurricanes Ivan and Katrina in 2004 and 2005, respectively. Insurance premiums for residential and commercial buildings skyrocketed as companies tried to recover losses from the massive damage along the Gulf Coast.
Ben Brooks, then a state senator and now a circuit court judge in Mobile County, is credited with leading the push for incentives, along with other members of the coastal delegation in the Legislature. The 2008 recession slowed the construction industry, but the numbers of fortified homes now being built in Alabama are drawing attention nationally, according to Green.
“The legislation was fantastic. It was passed in 2009. At that time when the legislation passed there were no fortified homes in the state whatsoever,” Green said.
Smart Home America was founded in 2009. As with Fairhope, most of the fortified requirements were already part of the stronger building codes enacted after Hurricane Katrina, Green said.
“It a combination of buy-in from the building community and elected officials. We had the incentives in place, which is huge,” he said. “You have to have that carrot for our homeowners to make it worth their while. And building codes have improved dramatically, especially since Hurricane Katrina.”
Another carrot may be resale value. A few months ago, the Alabama Center for Insurance Information and Research at the University of Alabama released a study of resale value showing that fortified homes in Baldwin and Mobile counties sold for nearly 7 percent more than homes without the certification.
Coastal residents and elected officials have long argued that the rest of the state is just as likely to suffer severe wind damage from tornadoes as well as hurricanes and tropical storms moving north after landfall, but only the southernmost counties are charged higher premiums.
However, a recent expansion of the discounts to the rest of the state is likely to further boost the number of fortified homes. At the end of October, the Alabama Department of Insurance announced that admitted insurance carriers would have to offer discounts north of the coastal zone for both residential and commercial buildings. The change is effective in 2018, with discounts ranging from 10 percent to 60 percent.
Because 70 percent of the fortified homes are in Alabama, Smart Home America is starting to receive more inquiries from other states, especially since Hurricane Matthew struck the East Coast of Florida, Georgia, South Carolina and North Carolina. “There is quite a bit of interest in North Carolina,” he said. Even Oklahoma, nowhere near a coast, is interested because of the high number of tornadoes.
But despite the program’s apparent success, more needs to be done to make insurance affordable for coastal residents who already own homes, said Michelle Kurtz, a Foley resident active in the Homeowners’ Hurricane Insurance Initiative and who was a member of Gov. Robert Bentley’s insurance reform work group.
Kurtz said she applauds the fortified homes initiative, particularly as it applies to new construction, but believes well-constructed homes that have withstood previous storms deserve bigger breaks on insurance premiums.
“My house was constructed in 1944,” Kurtz said. “It’s gone through all the major hurricanes, and it’s still standing.”