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The roof on Ron Watson's house in Spanish Fort, Ala., looks about the same as the roofs you'd see across the state, but every year, it's saving him money on his insurance.
Thanks to special nails designed to stay in place during high winds and other hidden construction details, it's less likely to be damaged or ripped off in the hurricane-force winds Alabama often faces. As a result, Watson's insurance company offered him a discount on his premium, part of a program pioneered by Alabama to encourage homeowners to make their houses more resistant to disasters.
"That's a big incentive," Watson says. "Homeowners insurance now has been through the roof because of the storms we've had through here."
States around the country are developing similar insurance discount programs, modeled after Alabama's, as a way of addressing an ever-growing insurance crisis. Premiums are getting more expensive as the cost of extreme weather disasters surges. At the same time, many homeowners haven't taken steps to protect their houses from those disasters, like using stronger building materials that can better withstand storms and wildfires.
More than 50,000 roofs in Alabama have now been strengthened, according to state officials, meeting what's known as the FORTIFIED Roof standard. Homeowners can qualify for discounts of 20% to 35% off the wind portion of their insurance, or even more, if other parts of the house are strengthened.
An insurance discount program is far newer in California, where tens of thousands of homes have been destroyed by wildfires in recent years, and insurance costs are soaring. After January's Los Angeles fires, State Farm got approval to hike insurance rates by 17%.
Still, California's discounts are far lower than in the Gulf States, often less than 10%. And no discount program helps with an even faster-growing concern for homeowners: losing insurance altogether. Almost 2 million Americans were dropped by their insurance companies from 2018 to 2023, with the biggest impact in counties at highest risk from disasters, according to a report from the Senate Budget Committee.
While state insurance commissioners say doing home improvements could potentially help a homeowner retain their insurance, state governments lack the regulatory authority to tell insurance companies whom to insure.
As hurricanes, wildfires and storms get more intense with climate change, disaster experts say it's crucial for entire communities to retrofit homes to withstand what's coming — and for insurance companies to take that into account when deciding whether to offer coverage. Colorado lawmakers recently passed a bill to set up a wildfire insurance discount program there.
"The discount is nice and it's a positive development, but it doesn't matter if they won't write you the insurance," says Dave Jones, former insurance commissioner of California and now director of the Climate Risk Initiative at UC Berkeley Law. "While focus on the discount is important, there needs to be an even greater focus on getting the insurers' models that they use to decide whether to write and renew insurance to account for these things."
Alabama invests in up-front protection
On the Alabama coast, the wind and rain act as a one-two punch.
The first blow comes as winds strip roofs of shingles and any other form of protection. The second hit arrives when rain pours through the exposed openings and rots the inside, from family photos to drywall.
Damage from hurricanes in the mid-2000s — from Ivan to Katrina — led to home insurance wind premiums more than tripling in some cases, according to the Alabama Department of Insurance. In the years since, tens of thousands of policyholders lost home insurance altogether.
To address the one-two threat from storms, Alabama came up with a one-two solution in 2012 by adopting the FORTIFIED Roof standard, a set of rules to follow when building a roof to make it more resistant to storm damage.
The first part comes from installing a waterproof stick-on layer to a roof to prevent rain from getting through, even if the wind strips away some shingles. The second part involves stopping that from happening in the first place by using ring shank nails — specialized ridged nails that are much harder to pull out than their smooth counterparts, even during high winds.
"I tell people all the time, Mother Nature is undefeated," Travis Taylor, acting director of Alabama's Office of Risk and Resilience, says. "But we have to do what we can do to limit the exposure we have, limit the damage, by fortifying."
When Hurricane Sally hit Alabama in 2020, fortified roofs outperformed those on homes that weren't part of the program. A recent study by Alabama's insurance department found that homeowners with fortified roofs filed fewer insurance claims and claimed less damage.
"Getting a good, certified roof is a lot," says Baldwin County homeowner Watson, who recently observed contractors install a fortified roof on his home. "Watching them do it I realized, man, all the ones I had done before wasn't near as good as this one is."
Damage from fallen trees remains a major expense, a danger from storms that fortified roofs are not designed to protect against.
Alabama and insurance companies offer a financial incentive
Large parts of the Alabama coastline have adopted building codes similar to the FORTIFIED standards for both new constructions and reroofing old ones. Still, a new roof can cost around $10,000, in some cases well more. So Alabama developed a strategy for getting homeowners to switch over.
First, the state required insurers to provide at least a 20% discount on the wind premium for a fortified roof starting in 2014. The savings is only on the wind portion of the homeowners insurance. But along the Alabama coast that can be as much as 80% of the total premium, meaning this discount can save customers hundreds of dollars each year.
The second incentive involved the state paying for the installation. The Strengthen Alabama Homes grant program covers up to $10,000 of the cost, not counting an inspection. Every three months, Alabama homeowners on the coast refresh the program's website, hoping to be one of the lucky ones to get in and receive a grant when the application goes live. Since the grants started in 2016, about 8,500 homes have been retrofitted with that funding, and the state now plans to offer grants in some counties farther north for the first time this November.
"I almost cried. I was like this is too good to be true," says Richard Kindle, a homeowner in Spanish Fort, Ala., who received the grant. "This was a program I really needed to get in on."
Louisiana and Mississippi have since adopted insurance discount programs just like Alabama's.
"There are states that are copying our program down to the letter," Taylor says. "Everywhere the word 'Alabama' is mentioned, they replace it with their own state."
Californians weigh the state's smaller discounts
In Oakland, Calif., Elizabeth Stage doesn't have to imagine what a wildfire might do to her neighborhood, where the hills are covered in dense brush. She saw it firsthand in 1991, when the Oakland Hills Fire destroyed more than 3,000 homes.
"The '91 fire got within two houses of mine," Stage says. "House next door was unscathed, and the one past that was completely charred on one side."
So a few years ago, as she started planning some much-needed home maintenance, Stage knew it was an opportunity to reduce the risk her home faces. Her redwood deck was replaced with a composite material that's less likely to ignite. The roof and siding were also replaced with less-flammable materials. The windows were upgraded to dual-pane tempered glass, which resists high temperatures that can break other windows. She already made sure that flammable vegetation was trimmed away within 5 feet of the house every year.
To get a discount on her insurance, Stage needed her home to be certified with an inspection from the Insurance Institute for Business & Home Safety, a research group funded by the insurance industry that studies what makes homes burn, even subjecting building materials to showers of embers. The cost is $125 for the inspection, but Stage realized that her home still has a wooden staircase on one side, which would disqualify her.
At best, her insurance company would offer her up to 15% off her premium. Stage is still planning on fixing the staircase, but getting the discount isn't her motivation.
"It would be frosting on the cake," she says. "Before I worry about my premiums, I need to worry about a nonrenewal notice." She's hoping it's a way to avoid being dropped by her insurance company, as has happened to many of her neighbors.
For many homeowners, the savings of a few hundred dollars isn't enough to justify doing the expensive projects needed to qualify. Replacing a roof or siding with fire-resistant building materials or cutting back flammable trees can cost tens of thousands of dollars.
In Berkeley, Calif., Bill Pottinger has already cleared the flammable vegetation around his hillside home, but he says the discount doesn't justify going through the certification process.
"So far, it hasn't been a strongly motivating factor," Pottinger says. "If it ever looked as if that made the difference between my being able to get insured, or at rates that were in the vicinity of $500 to $1,000 in premium difference, that's a much different picture."
How insurance discounts could drive more disaster prep
California's insurance discount program, known as Safer from Wildfires, was established in late 2022. For the largest insurance companies, the maximum discounts offered to customers range from 8% to 15%. To get those full discounts, companies generally require all aspects of the home be "hardened" or fireproofed, including the windows, eaves, roof, siding at the base of the house, gates and fences near the house and management of all flammable vegetation. Individually, each of those items generally qualifies for a 0.5% or 1% discount.
"I don't think these amounts will cause behavior to change," says Michael Wara, director of the Climate and Energy Policy Program at the Woods Institute for the Environment at Stanford University. "Window replacement, siding replacement — that is not something you do to save 2% of $2,000 a year."
The discount amounts are set by the insurance companies. They have to justify them to state regulators and show they reflect how property owners reduce their risk. California insurance regulators say while there's decades of research showing how much hurricane improvements reduce claims costs, the benefits of wildfire improvements are still being studied.
"These percentages will grow and be refined as more data come in," says Michael Peterson, deputy commissioner of climate and sustainability for the California Department of Insurance. "We will get more information on the performance of those actions and then be able to do similar things that really hold the whole system accountable for having percentages of discounts that do reflect the real risk reduction."
Insurance experts also point out that wildfires can be a more difficult hazard for a homeowner to prepare for. While replacing a roof may be fairly straightforward in hurricane country, protecting a home from wildfire can mean retrofitting many parts of the house, as well as continually maintaining flammable vegetation in the yard.
"We are in a fundamentally different position than Alabama," Wara says about California. "The benefits of a super roof are fully captured by the person that makes the investment. One of the challenges with fire is that it matters what your neighbors do too." Even when one homeowner prepares for a wildfire, their house may still be vulnerable if a neighbor's property is overgrown and starts to burn, because the powerful radiant heat can ignite nearby structures.
Insurance experts say if homeowners could avoid losing their insurance by doing disaster retrofitting, the programs could see far more participation. Currently, insurance companies in California don't have to consider whether someone has done wildfire improvements when they decide whether to renew a policy. (An exception is the company CSAA, which says customers can keep their insurance for at least three years if their home is wildfire certified.)
"This is a huge problem and one that insurers can and should address by making sure the models they use to decide whether to write or renew insurance account for empirically proven property and landscape-scale adaptation," Jones says. "They need to begin to do it, or states are going to pass laws to require it."
California state legislators introduced a bill in 2020 that would have required insurance companies to offer policies for wildfire-prepared homes, but the bill quickly failed. The state has started a program to help entire neighborhoods retrofit their homes, which is now working with pilot groups. A bill being considered by the Legislature, the California Safe Homes Act, would also provide grant money for home projects.
As the damage from disasters continues to escalate, experts say reducing the risk entire neighborhoods face is vital to keeping insurance available and affordable.
"The benefits of wildfire safety for insurance are that the lower the risk, the more insurable the property," Peterson says. "And so if we can align the actions and the incentives for wildfire safety, it has benefits for insurance."
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