Construction Building Codes
Better Building Codes for Better Insurance
Beaman Floyd
October 17, 2012
Strong, enforced building codes aren't just a key component to reforming the Texas Windstorm Insurance Association, as a recent story by Corpus Christi Caller-Times recently pointed out, but also for controlling the cost of homeowners insurance in all parts of Texas.
Weather-related disasters are the biggest cost driver in the homeowners insurance marketplace, and Texas has the most diverse weather risk in the country, with exposure to nine different types of natural disasters.
While Texans cannot control the weather, implementing and enforcing sound building codes for new construction or when rebuilding can help reduce the resulting damage caused by that weather — and drive down the cost of insurance claims.
Building codes are designed to reduce deaths and property damage from hurricanes and other weather hazards by setting design, construction and maintenance standards for structures.
Yet Texas trails most coastal states when it comes to instituting and enforcing building codes, according to a residential building code analysis released earlier this year by the Insurance Institute for Business & Home Safety. Texas scored a dismal 18 points (out of 100) in the survey, lower than all but two of the 18 states along the Gulf of Mexico and the Atlantic coast.
Though Texas has adopted a statewide building code, the law allows municipalities to adopt weaker standards than set out in the code. Our low score in the survey is the result of the widespread lowering of standards in various areas allowed by current law, a lack of inspection and enforcement, and a lack of registration and licensing rules for various building trades.
The Texas Coalition for Affordable Insurance Solutions read the IBHS report with interest — we have long advocated broad adoption and better enforcement of nationally recognized building codes. The IBHS report should be part of the considerations of the Senate Intergovernmental Relations Committee, which during this legislative interim is charged to "review housing and development codes, and guidelines for structures in areas prone to natural disasters, and make recommendations on how these structures can be 'hardened' to avoid loss."
The Texas Coalition for Affordable Insurance Solution looks forward to working with the committee on this charge. Good building codes, properly enforced, will save property and lives. They also will help insurers evaluate and manage the risk of property damage in our catastrophe-prone state. Damage to homes built to a strong code is less likely or less severe, leading to fewer losses and lower-cost insurance claims.
Nine years ago Texas began passing reforms to strengthen its homeowners insurance market. Today, more companies than ever are competing for business here, even though they continue to absorb some of the most severe weather losses in the country.
Texas has the rare opportunity for a clear double benefit in this issue. Enforcing strong building codes not only is important to public safety, it is a logical next step toward a healthier insurance marketplace.
SOURCE: www.caller.com/news/2012/oct/17/better-building-codes-for-better-insurance/