Improved Building Codes Can Reduce Damage from Natural Disasters — and Lower Insurance Costs

by Robert W. Cobb, Director – Community Hazard Mitigation

Can improved building codes reduce damage from natural disasters? The answer is a resounding yes. Here are just a few examples:

The Louisiana State University (LSU) Hurricane Center conducted a study of residential wind damage following Hurricane Katrina. Their findings show that “economic losses, which include damage to buildings and contents, would be reduced an estimated 65 percent” if the buildings in the affected area had protected building openings, improved roof-deck connections, and improved roof-to-wall connections. That would have meant a reduction from $4.8 billion to $1.7 billion.
Studies of disasters from 1994’s Northridge earthquake to 2005’s Hurricane Katrina graphically demonstrate that effective building-code enforcement reduces loss in catastrophic events.
A 2005 study conducted by a council of the National Institute of Building Sciences concluded that funds directed toward hazard mitigation before an event reduce losses by almost four dollars for every dollar spent. The federal government supports that concept with predisaster grants to communities that effectively institutionalize natural hazard mitigation strategies in their building-code adoption and enforcement.

Mitigation strategies reduce building damage in LSU study

The maps below show the percentage of residences experiencing at least moderate damage (including major roof cover damage and moderate window breakage) from a simulated hurricane with and without mitigation measures. Mitigation measures consisted of construction practices related to hurricane requirements by the International Residential Code (IRC). The IRC is a comprehensive building code of minimum regulations for one- and two-family residences. With mitigation measures in place, the number of residences sustaining moderate damage is half, from 37,000 to 18,000. Results are even more dramatic at greater damage levels. For severe damage, the number of buildings damaged is reduced 85 percent and for total destruction, 93 percent. Mitigation measures also significantly reduce damage along coastal areas.

Click the image above for a larger version

The results are clear. Mitigation measures — changes in specific construction practices in this case — are extremely effective in reducing building damage and economic losses. The study supports how critical it is for communities to adopt and enforce building codes. Even in areas where codes are strictly enforced, upgrading the codes leads to significant reductions in damage.

Building Code Effectiveness Grading Schedule (BCEGS®)

Through the BCEGS® program, ISO collects information — for more than 19,000 communities throughout the country — on building-code adoption and enforcement practices. We then analyze the data and assign each municipality a Building Code Effectiveness Classification from 1 to 10. Class 1 communities represent exemplary commitment to building-code enforcement; Class 10 indicates no recognizable enforcement.

Municipalities committed to enhancing quality of life through building-code enforcement demonstrate better loss experience when a catastrophe strikes — and insurance rates can reflect that. Stricter building codes should result in safer buildings and may reduce catastrophe-related property damage, ultimately lowering insurance costs. Those benefits provide an incentive for municipalities to adopt the latest unamended edition of nationally recognized building codes and enforce them rigorously.

This community in Pass Christian, Mississippi, shows the only surviving home in an area completely destroyed by Hurricane Katrina. The one surviving home adheres to the flood provision of the current building code.

Potential benefits are not limited to reducing everyday property risk. Rigorous building-code enforcement also helps communities reduce the economic and social disruption resulting from the widespread destruction of natural disasters.

Insurers can use the classifications as an underwriting tool to:

gain a competitive edge in markets with favorable classifications
analyze portfolio risk
charge adequate premiums in markets with less favorable classifications
adjust deductibles based on classifications

By knowing the effectiveness of local building-code enforcement, insurers can better estimate how well structures will fare in a hurricane, earthquake, or other disaster — leading to better risk assessments.

What’s the fastest way to add BCEGS information to your policies?

LOCATION® offers a fast and accurate way to get information on building-code enforcement. LOCATION building-code information gives you the personal and commercial BCEGS code for your risk, the year the code became effective, and the name of the classified BCEGS jurisdiction. The report is available for every address in all states except Idaho, Kansas, and the District of Columbia.

The BCEGS classification represents a condensed snapshot of code-enforcement efforts in a community, and it may provide additional insights, such as:

amendments to the adopted code
detail of plan review
number of inspections required of each inspector per day
training and certification of staff
type of inspection conducted
type of construction projects
volume and value of construction

ISO can customize the data to meet your needs and even collect data of special interest to your company.

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Comments

The comments posted by our readers do not represent the opinions of ISO or the author.

From: PETER BELLUCCI
Comment: I agree with the photo taken above if all builders took the time to build a property to code and did it well the losses would be limited. It would be good to see improvements in this area. It would behoove the federal government to improve the building codes as all affected peoples lives would be vastly improved. It is a sad state of affairs that folks have to be told to build this way as I am sure they were wanting to find ways to cut costs and improve the bottom line. However they also have a dream of building a quality home for a family.
Peter Bellucci, LUTCF, BBA

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