Louisiana homeowners will soon be able to apply for grants to retrofit their roofs to beyond-code construction standards, spurring discounts to their insurance premiums.
State lawmakers appropriated $30 million to the Louisiana Fortify Homes Program (LFHP) in a budget bill approved earlier this month after establishing the program last year absent funding. LFHP will enable eligible homeowners to apply for up to $10,000 in grants to fortify roofs to meet the Insurance Institute for Business and Home Safety (IBHS) Fortified roof standard.
Louisiana Insurance Commissioner Jim Donelon said at a June 14 press conference he expects the application process to open in October.
Lawmakers also passed accompanying legislation that will require insurance companies to provide actuarially justified discounts to policyholders who build or retrofit structures to comply with the IBHS Fortified standard.
The effects could be significant. Louisianans who retrofit or build their homes to the standard can expect to save anywhere from 20-52% on the wind portion of their homeowners insurance, according to Smart Home America.
Any insurable property – commercial or residential – built or retrofitted to comply with the requirements of the Fortified standard will qualify for a discount. Mike Huval, chair of the House Insurance Committee, said the legislation will encourage more property owners to build to the Fortified standard outside of the grant program.
Another bill passed by lawmakers will require insurers to offer an endorsement to homeowners’ policies that will upgrade the policyholder’s nonfortified roof to the Fortified roof standard if the home incurs damage requiring a roof replacement.
The endorsement offer will be made at the time of writing a new policy on a nonfortified home and upon first renewal of an existing policy on a non-Fortified home after Dec. 31.
A ‘long-term answer’
Fortified is a voluntary beyond-code construction and re-roofing method that strengthens homes using locked down roof edges, a sealed roof deck, ring-shank nails and impact-resistant shingles. Structures built or retrofitted to the Fortified standard can withstand winds up to 130 mph, torrential rain and hail up to 2″ in diameter, lab tests and real-world events show.
“Fortified is our long-term answer,” Donelon said.
Louisiana’s program is modeled off a similar program in Alabama that, unlike Louisiana, is funded by the insurance industry – not the state’s general budget. In 2020, Alabama legislators passed a bill ensuring a Fortified endorsement is available to every homeowner in the state.
Of the more than 35,000 homes built in Alabama to Fortified standards so far, 6,000 were done with grant money.
“When (Alabama) started offering grant money, they broke Taylor Swift’s record,” Donelon said. “They were out of funds within eight seconds of going live with the offer of grant money.”
Donelon said tight budgets in Louisiana made it impossible to fund the Fortified program until this year, when Louisiana lawmakers entered the legislative session with a $1.6 billion surplus.
As is the case in Alabama, Louisiana will roll out a first come application process, subject to availability.
To be eligible for a grant, a home must be an owner-occupied, primary residence with a homestead exemption and cannot be a condominium or mobile home.
The home must be in good repair unless damaged by a hurricane, non-hurricane wind, or hail, and the homeowner must provide the LFHP proof of a wind insurance policy, and if in a flood zone, proof of a flood insurance policy.
Once approved for a grant, the homeowner may contract with an LFHP-approved contractor to perform the work to fortify the roof.
An evaluator will perform all required evaluations, and the IBHS will review the evaluation and determine whether to issue a Fortified designation.
Homeowners who receive a grant of up to $10,000 will likely still have to pay out-of-pocket expenses. The average roof replacement costs more than $11,000.
With evaluator fees, Louisiana homeowners can expect to pay an additional $1,200 to $2,200 depending on the size and complexity of the roof, said Fred Malik, managing director of FORTIFIED at IBHS.
Louisiana policymakers believe strengthening properties to the fortified standard will signal to insurance companies that the state is taking windstorm and hurricane mitigation efforts seriously.
“From the outside looking in, insurance companies around the country looking at Louisiana, we have really stepped up our building codes, which shows them that we recognize we have a problem,” said Senate Insurance Committee Chair Kirk Talbot. “We recognize that we are a big target for hurricanes and named storms making land fall, and that we recognize that and we’re doing something about it.”
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