Tornado-resilient standards offer homeowners lower insurance rates

Insurance companies are offering discounts on homes built or retrofitted to certain tornado-resilient standards since a law went into effect April 1 requiring them, according to the Oklahoma Insurance Department.

Numerous companies have notified the department of their premium rate discount, Insurance Commissioner John D. Doak said.

“Homeowners will see the advantage of having a stronger home with more affordable insurance rates, higher resale value and can withstand up to an EF-2 tornado,” he said.

The law, passed last year, requires insurance companies’ savings to be passed on to consumers. Homeowners who retrofit or build a new home to certain specified standards are entitled to a discount because of the more resilient construction.

The recalculated premiums are based on insurance companies’ own actuarial analysis.

Fortified standard

The law does not mandate building codes or standards. It uses the Fortified construction standards set by the Insurance Institute for Business & Home Safety in Tampa, Florida. For more information on the standards, go to disastersafety.org/fortified.

Central Oklahoma Habitat for Humanity brought the program to Oklahoma in a big way last year by starting to build all of its homes to the higher standards.

The Fortified Homes program can retrofit an existing home or be built into a new one. It offers three tiers, Bronze, Silver and Gold.

At the Bronze level, a home’s roof and vents are engineered to minimize the effects of rain and high winds. The Silver level addresses the windows and doors as well as the roof.

The Gold Standard adds straps, brackets and other specialized hardware to connect floor, walls and roof together to create one system, keeping the whole structure intact under stress from high winds, hail and hurricanes.

Builder Aaron McRee of Yukon said he just finished the first Gold-level fortified home by a forprofit builder in the state, between Yukon and El Reno off Banner Road. McRee also is construction manager for Central Oklahoma Habitat.

“I spoke with the homeowner about the pros and cons of the program. The potential savings on his homeowner’s insurance and the peace of mind were the deciding factors to build it as Fortified Gold,” he said.

The insurance incentives should create demand for the specialized construction, he said, especially since “depending on their insurance company, payback for the extra cost shouldn’t be that long.”

Rising to the challenge

McRee said the program presents many challenges for builders.

“The first and foremost

is the training of contractors to build to the Fortified standards,” he said. “The other is the proper documentation. Photos must to be taken of all phases of the foundation, framing, roofing, and completion. Lastly, the IBHS (Institute for Business & Home Safety) compliance forms have to be filled out and turned in, along with the photos, to the local evaluator.”

McRee added, “The Fortified program is a learning curve for builders and contractors, similar to the energy programs such as LEED (Leadership in Energy & Environmental Design), Energy Star, and (Oklahoma Gas and Electric Co.’s) Positive Energy program — difficult at first, but it becomes second nature after repetition.

Seventeen insurance companies notified the Insurance Department that they are offering a discount. Others will also be offering the discount because the two advisory organizations to which they subscribe, the American Association of Insurance Services and the Insurance Services Office, have filed discounts with the department, Doak said.