Louisiana Regulation Sets Mandatory Discounts for Fortified Homes

A new regulation requires Louisiana insurers to provide premium discounts to residential properties that obtain a Fortified designation in accordance with standards put forth by the Insurance Institute for Business and Home Safety (IBHS).

Fortified homes in the central and south Louisiana will be eligible for higher discounts than homes in the northern part of the state. Residential properties with upgraded Fortified standards will see the greatest discounts.

Under Regulation 136, insurers will be required to implement the premium discounts no later than January 1, 2027. The discounts are applicable to the hurricane portion of the premium and apply to all new or renewed residential property insurance policies issued by the start of next year.

Many insurance companies already provide Fortified roof discounts, with most discounts ranging from 15% to 30%.

A Louisiana-specific benchmark mitigation table was developed to determine the discount rate. The Louisiana Department of Insurance (LDI) used hurricane catastrophe models from Verisk (previously AIR) and Moody’s (previously RMS) to establish the benchmarks.

Residential Hurricane-Only Premium Discounts

The regions used in the benchmark mitigation discount table were developed using the existing Louisiana Coastal Zone, along with an analysis of variation in CAT model-derived discounts across the rest of the state, LDI shared.

Louisiana Insurance Commissioner Tim Temple and state lawmakers view the Fortified standard as a way to mitigate exposure to severe weather, particularly hurricane-strength winds. Fortified roofs are designed to withstand wind speeds of up to 130 mph.

The state is more than two years into the Louisiana Fortify Homes Program, which offers grants of up to $10,000 for residents to fortify their roofs to standards set by IBHS.

Louisiana has over 11,000 Fortified roofs, including over 4,100 through the grants program, according to LDI data.

Topics Legislation Louisiana