ALDOI Establishes New Discounts for IBHS FORTIFIED Structures Throughout Alabama
At the end of the year, the Alabama Department of Insurance established new wind mitigation discounts for property insurance for IBHS FORTIFIED residential and commercial structures in Alabama.
Under Bulletin 2016-07, the discounts range from 35 percent to 60 percent on the hurricane portion of a policyholder’s premium and discounts from 20 percent to 35 percent on the other wind portion of the premium. These discounts are significant since the hurricane/wind exposure represents approximately 70 to 80 percent of the cost of homeowners insurance on the coast and approximately 40 to 60 percent of the cost upstate in the tornado alley. These discounts can generate annual insurance premium savings to consumers that range from several hundred dollars inland to several thousand dollars along the coast.
Alabama’s Legislature passed ACT 2015-313 continuing its support for the Insurance Institute for Business & Home Safety to identify construction standards that will strengthen residential and commercial structures against hurricanes, straight-line winds and small tornadoes. The Act requires all insurers in Alabama to provide residential and commercial policyholders with discounts, once their structures have been built or retro-fitted to IBHS FORTIFIED standards.
By working with IBHS, The American Institute for Research and Aon Benfield to estimate the loss savings generated by these wind mitigation features, Alabama Insurance Commissioner Jim Ridling released Bulletin 2016-07, which states the benchmark discounts for residential and commercial structures for each county in Alabama.