Industry Issues | Catastrophic Risks

Strong Building Codes Save Lives, Reduce Damages

Enacting and enforcing strong building codes can save lives and billions of dollars in damages from hurricanes and other natural disasters. Model building codes provide protection from tragedy caused by fire, structural collapse and general deterioration.

The insurance industry supports strong building codes because we see firsthand the personal and financial impact that inadequate standards and code enforcement can have on a family, community or state. To ensure that the nation is better prepared, PCI supports the adoption of strong statewide building codes.

The adoption of uniform statewide minimum building codes results in properties being constructed to meet specified safety standards, which helps to reduce deaths, injuries and property damage.

How Consumers Benefit from Strong Building Codes

The way buildings are constructed can have a significant impact on minimizing property damage resulting from natural disasters. Over the long-term, by making buildings more resistant to damages a property owner will have fewer insurance claims. Less property damage following a natural disaster speeds up the recovery process and causes less disruption for property owners. This also puts less pressure on the insurance marketplace and can minimize the impact that a natural disaster could have on premiums and the availability of insurance.

Model codes actually keep construction costs down by helping to establish uniformity in the construction industry. According to the Institute for Business and Home Safety, for each dollar increase in construction costs, there is a long-term savings of 3 to 16 dollars. This concept is similar to environmental and energy benefits a consumer sees when purchasing a more efficient air conditioning system or more thermally efficient windows.

Building a home that can better withstand hurricane force winds adds less than five percent to current construction costs. This is a small investment to make in what for most of us is our largest and most important asset.

Strong building codes reduce the need for public disaster aid and create a level playing field for designers, builders and suppliers. They promote an increased level of comfort for real estate buyers, who can be assured that their homes and commercial buildings meet at least minimum standards for safety and soundness.

PCI Shaping the Issues
  • The Property Casualty Insurers Association of America (PCI) supports and seeks to advance codes standards, legislation and regulation governing construction that is likely to reduce insured losses;
  • Supports legislation and regulation requiring states to establish, and regularly update, building requirements using the most current version of nationally accepted model building codes and standards;
  • Supports legislation and regulation adopting statewide building codes;
  • Supports legislation and regulation establishing administrative systems that include appropriate enforcement, training, assistance, and awareness and product approval components. PCI will support specific provisions of state building code legislation that maximize coverage and effectiveness subject to parameters set by local economic and political conditions;
  • Opposes mandatory insurance premium credits as incentives to mandate enhanced mitigation; and
  • Opposes local exemptions to building codes requirements that diminish or weaken public safety and health.