The Alabama Department of Insurance (ALDOI) has established new wind mitigation discounts for property insurance for IBHS FORTIFIED residential and commercial structures in Alabama. Under Bulletin 2016-07, discounts range from 35% to 60% on the hurricane portion of a policy holder's premium and discounts from 20% to 35% on the other wind portion of the premium.
Alabama's Legislature passed ACT 2015-313 demonstrating its continued support of efforts by the Insurance Institute for Business & Home Safety (IBHS) to identify construction standards that will strengthen residential and commercial structures against hurricanes, straight-line winds and small tornadoes This Act requires all insurers in Alabama to provide residential and commercial policy holders with discounts, once their structures have been built or retro-fitted to IBHS FORTIFIED™ standards.
After months of diligent work with IBHS (www.disastersafety.org), The American Institute for Research (www.air.org), and Aon Benfield (www.aon.com), to estimate the loss savings generated by these wind mitigation features, Alabama Insurance Commissioner Jim Ridling released Bulletin 2016-07 announcing benchmark discounts for residential and commercial structures for each county in Alabama. The analysis conducted by the Department of Insurance indicates that structures mitigated under IBHS standards should earn discounts from 35% to 60% on the hurricane portion of their premium and discounts from 20% to 35% on the other wind portion of their premium. These discounts are significant since the hurricane/wind exposure represents approximately 70% to 80% of the cost of homeowners insurance on the coast and approximately 40% to 60% of the cost upstate in the tornado alley. These discounts can generate annual insurance premium savings to consumers that range from several hundred dollars inland to several thousand dollars along the coast.
Mitigating homes and commercial structures has the greater benefit of improving community resiliency after a hurricane or tornado, reducing clean-up costs and the impact on businesses due to the displacement of workers. Alabama's goal is to educate consumers and businesses to the many benefits of mitigating our communities so as to reduce the devastation caused by hurricanes and tornadoes. To this end, Smart Home America ( a non profit organization based in Alabama but serving many states), has launched a program called "Don't Goof When You Re-Roof™" to educate consumers on the advantages of re-roofing their homes to IBHS standards In addition, the ALDOI launched it's Strengthen Alabama Homes Grant Program last year to provide funding to consumers on a needs basis to help retro-fit their homes to the IBHS standards. As a result of these efforts, Alabama leads the nation in the number of IBHS mitigated homes, and the count is expected to grow at an accelerated rate as word spreads across the state.