Strong and enforced building codes have proved valuable in mitigating hurricane and other disaster losses, but changes may be needed as communities prepare for climate-related risks, experts say.
With five Category 5 hurricanes in the Atlantic in the past four years, there are rising concerns over how to strengthen resilience and adjust to greater intensity and frequency of storms going forward, they say.
The entire state of Florida is susceptible to hurricanes and strong winds, but typically “hurricanes have been considered a sublimiting event for the Northeast” compared with the southern tri-county area of Miami-Dade, Broward and Palm Beach counties, which is in the traditional path of hurricanes, said Twane Duckworth, chief of insurance and risk management for the City of Jacksonville, Florida.
“That myth has recently been debunked insofar as we have more experience in the northeast part of Florida with hurricanes in the past three or four years with hurricanes Matthew, Irma and Hermine,” he said.
Hurricane Dorian, a Category 5 storm equal to the size of Florida, showed that “it doesn’t matter what part of the state you are in if a hurricane makes landfall,” Mr. Duckworth said.
As a result, changes are needed so that building codes in parts of Florida that traditionally have not seen high-velocity winds from hurricanes are strengthened, he said.
Building codes are dynamic, but they can be slow to change, said Peter Dailey, San Francisco-based vice president of model product management at catastrophe modeler Risk Management Solutions Inc.
For example, Florida’s building code is on a three-year cycle, so there is “a cycle of review and potential modification to the building code,” Mr. Dailey said.
If the risks of hurricane winds were the same as 15 years ago, the three- year cycle would be enough, but given the influence of climate change on hurricanes, that may no longer be the case, he said.
“It may be pointing us in the direction of more frequent review of building codes,” Mr. Dailey said.
Evaluating the effectiveness of building codes in place today is important, said Lance Malcolm, U.S. president, contractor connection at Crawford & Co. in Jacksonville, Florida.
“There’s always opportunity for improvement, that’s why we have to be vigilant and make sure that we are keeping up with new techniques, construction methodologies and new construction materials, and balance out how we apply those building codes to new construction and to rebuilding structures after loss,” Mr. Malcolm said.
Part of the challenge is that there is no universal approach to building codes across the United States, said Jim Breitkreitz, Chicago-based vice president of property services, risk engineering U.S. at Zurich North America.
“This is administered state-by-state and individual states delegate to local municipalities.
There’s no universal treatment or adoption of building codes … and there are areas in the country that are not covered by building codes at all,” Mr. Breitkreitz said.
Rising costs associated with building structures that can withstand higher wind speeds and greater storm surges is another concern, experts say.
“The question is whether we should build to be resilient toward Category 5 storms. We don’t build for the storms we have today let alone what a warming climate might bring in the future,” said Mark Bove, natural catastrophe solutions manager at Princeton, New Jersey-based Munich Reinsurance America Inc.
“In areas where there are good building codes, the wind-designed standards are probably up to a maximum of up to 140 mph or so. What’s the cost-effectiveness of building even more resilient?” he said.
“The probability that an individual location will be impacted by a Category 5 storm is very small, so whether the economics, time, cost and to some extent aesthetics are all palatable or affordable is an open question,” he said.
For insurers, building to a more resilient standard and code compliance is a key consideration, experts say.
“When we go to insure a building, we will work with the customer, learn how a building was built, and that will have an impact on the way underwriters look on a particular risk,” Mr. Breitkreitz said.
The City of Jacksonville purchases property insurance up to $400 million in limits that covers approximately 1,000 structures, Mr. Duckworth said.
“Our total insurable value is over $3 billion; we’re not going to have a checking account big enough to weather a storm that could cause significant damage to our portfolio,” he said.
“Meeting codes and giving insurers data to indicate we have structurally sound property enabled them to feel more comfortable in giving us a reduced premium,” Mr. Duckworth said. The rate was reduced somewhere between 5 to 10 cents per $100 of value, he said.
