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Homeowners in Louisiana will soon be able to apply for grants to retrofit their roofs to building codes that exceed current building codes, resulting in discounts on their insurance premiums.
State lawmakers provided $30 million to the Louisiana Fortify Homes Program (LFHP) in a budget approved earlier this month after the program was set up without funding last year. LFHP will allow eligible homeowners to apply for grants of up to $10,000 to affix roofs to meet the Insurance Institute for Business and Home Safety (IBHS) affixed roof standard.
Louisiana Insurance Commissioner Jim Donelon said at a news conference June 14 that he expects the application process to open in October.
Legislators have also passed accompanying legislation that requires insurance companies to provide actuarially justified discounts to policyholders constructing or retrofitting buildings in order to comply with the IBHS Fortified standard.
The impact could be significant. According to Smart Home America, Louisiana residents who retrofit or build their homes to the standard can expect to save anywhere from 20% to 52% on the wind portion of their home insurance.
Any insurable property – commercial or residential – that is built or retrofitted to meet the requirements of the Fortified Standard is eligible for a rebate.
Another bill passed by the legislature would require insurers to offer homeowners’ policies an addendum that upgrades the policyholder’s unattached roof to the attached roof standard if the home suffers damage that requires roof replacement.
The offer of approval will be made at the time of writing a new unfortified home policy and at the first renewal of an existing unfortified home policy after December 31st.
A “long-term answer”
Fortified is a voluntary, over-the-code building and re-roofing method that strengthens homes with secured roof edges, a sealed roof deck, ring nails and impact-resistant shingles. Structures built or retrofitted to the Fortified standard can withstand winds of up to 130 miles per hour, torrential rain and hail up to 2 inches in diameter, laboratory tests and real-world events show.
“Amplified is our long-term response,” Donelon said.
Louisiana’s program is modeled after a similar program in Alabama, which, unlike Louisiana, is funded by the insurance industry—rather than the general state budget. In 2020, Alabama lawmakers passed a bill that will ensure that a Fortified notice is available to every homeowner in the state.
Of the more than 35,000 homes built to Fortified standards in Alabama to date, 6,000 were built with grants.
“When[Alabama]started offering grants, they broke Taylor Swift’s record,” Donelon said. “They ran out of funds just eight seconds after going live with the offer of grants.”
Donelon said tight budgets in Louisiana made it impossible to fund the Fortified program until the Louisiana legislature entered the legislature this year with a $1.6 billion surplus.
As in Alabama, Louisiana will adopt an application process that takes availability into account.
To be eligible for a grant, a home must be an owner-occupied single-family primary residence with a home tax exemption and cannot be a condo or mobile home.
The home must be in good condition unless damaged by a hurricane, non-hurricane wind or hail and the homeowner must provide the LFHP with proof of a wind insurance policy and if it is in a flooded area located, provide proof of a flood insurance policy.
Once the grant is approved, the homeowner can hire an LFHP-approved contractor to complete the roofing work.
An assessor conducts all required assessments and the IBHS reviews the assessment and decides whether to award a Fortified designation.
Homeowners who receive a grant of up to $10,000 will likely still have to foot the bill. The average roof replacement costs more than $11,000.
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Homeowners in Louisiana, Alabama
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