Legislators hear insurance industry’s resounding voice after the storm

Sound, up-to-date and successful building codes are essential for construction, but codes must also be enforced and continuously updated to effectively contribute to disaster mitigation, said Leonard C. Brevik, National Association of Professional Insurance Agents CEO at the National Council on Insurance Legislators meeting last month in Weston, Fla.

Other participants in the NCOIL panel on “Reassessing State Building Codes: Mitigation and Enforcement,” were Jeffrey Burton, Institute for Business & Home Safety business codes manager; Mark Smith, Insurance Services Office, assistant vice president of Government Relations; Keith Lessner, Property Casualty Insurers Association of America, vice president of loss control; and moderator, Rep. Donald Brown (R-Fla.), chairman of the Florida House Insurance Committee.

Panelists agreed unanimously that uniform statewide building codes are necessary to have everyone prepared for hurricanes and that local building departments had to enforce stronger codes.

‘Hurricane fatigue’ common
Burton pointed out that in several parts of Florida, people are still living in FEMA trailers.

He also suggested there comes a point when a hurricane is approaching that residents realize they can not get out. “During the 2005 hurricane season, after the fourth storm people got tired and had ‘hurricane fatigue,” Burton explained. He pointed to Lakeland, Fla., as an example of this, where homeowners faced three storms in the same spot.

As long as codes don’t go overboard, the added costs aren’t much and are well worth the investment, he said. He pointed out that when Hurricane Andrew hit, the codes were uniform, so it was easy to quantify the destruction. When Hurricane Katrina hit Louisiana, some areas including Slidell had up-to-date codes, while other parts of the state had no building codes.

ISO’s Smith said up-to-date flood maps are a necessity because they make it possible to accurately determine if homes are in a flood zone.

Smith said that if the losses are less, then insurance rates will be lower. Consumers need to edcuated about the benefits of flood insurance, he said, claiming that even in the highest flood-prone areas, only 50 percent of homeowners purchase flood insurance. In other areas, less than 1 percent buy flood insurance.

Building codes not enough
“Having strong building codes is not enough,” Brevik said. “Having strong building codes and enforcing them will go a long way towards disaster mitigation, but as we saw recently in New Orleans, even that is not enough.

“The extraordinary events that lead to the vast destruction in New Orleans demonstrated that the first step in mitigation is the obligation of government,” Brevik said. “Only municipal, state and federal governments have the authority to handle this coordinated effort,” Brevik said,

Brevik maintained that the burden from weak building codes or lax enforcement falls on taxpayers, through direct losses, higher premiums, higher taxes and lost economic opportunities. The good news is, construction standards work. Structures built to higher standards are 77 percent less likely to be damaged, according to FEMA.

“Disaster prevention pays in so many ways,” Brevik explained. “Primarily, it saves lives. It also saves suffering, loss of property and jobs.”

Insurance agents have an important part to play in furthering the goals of stronger mitigation efforts, Brevik said.

“Agents are familiar with the local market and can therefore be in position to help assess the risks and provide consumers with the most appropriate products to help insure against those risks, in a cost effective manner,”he said.

“It is also important for us to realize that everything cannot be completely mitigated,” Brevik said. “We can and must do our best, but the nature of Nature is that the unanticipated will sometimes happen, despite our best efforts.”

Independent agents can also help educate the community on the importance of mitigation efforts. Finally, agents can be a strong advocate to local, state, and federal policymakers to help join the disaster mitigation effort.

Topics Catastrophe Agencies Windstorm Flood Market Hurricane