NAHB Urges Insurance Discounts for Resilient, Code-Compliant Homes
The U.S. housing insurance market has experienced significant challenges due to increasing frequency and severity of natural disasters, resulting in nearly 20% surge in home insurance premiums over the past two years. Concurrently, insurance coverage inadequacies and high premiums have limited new home constructions, especially for single-family and multifamily dwellings. In response, the National Association of Home Builders (NAHB) has advocated for state regulators to consider premium reductions for homes built to modern building codes or enhanced resiliency standards, promoting financial incentives for safer housing.
Homes constructed following updated building codes, particularly those developed post-2000, exhibit substantially greater resilience to natural hazards compared to older structures. Beyond minimum codes, home resiliency programs such as the National Green Building Standard (NGBS) Green +RESILIENCE Certification and the Insurance Institute for Business & Home Safety (IBHS) FORTIFIED program encourage builders and homeowners to voluntarily adopt more stringent standards, resulting in improved disaster resistance and potential insurance benefits.
The NGBS program, managed by Home Innovation Research Labs in partnership with NAHB and the International Code Council, is an ANSI-approved standard focusing on green residential building practices with an emphasis on resilience. To achieve the +RESILIENCE certification, homes must demonstrate at least 30% enhanced durability beyond typical International Building Code (IBC) or International Residential Code (IRC) requirements. This performance-based approach allows customization to address specific local hazards more effectively.
Similarly, IBHS, a nonprofit supported by insurers and reinsurers, administers the FORTIFIED program, which promotes structural improvements tailored to severe weather threats such as hurricanes and hailstorms. The program offers three certification levels, with FORTIFIED Gold requiring engineered continuous load path designs ensuring optimized structural anchorage. In certain states, homes certified under this program may qualify for significant premium discounts.
NAHB emphasizes the importance of data-driven insurance reforms encouraging risk-reduction investments in residential construction through code adoption and voluntary resiliency upgrades. These initiatives align with federal and state efforts, including HUD’s Resilience Guides and related grant programs supporting resilient building practices.
Overall, leveraging modern building standards and resilience certifications offers a pathway for mitigating insurance costs and enhancing disaster preparedness within the U.S. housing sector. Insurance professionals and regulators are encouraged to integrate these frameworks into underwriting and premium structuring to foster a more sustainable insurance marketplace and housing stock.