The same FORTIFIED roof earns a 20% to 55% wind premium discount in Alabama, 20% to 52% in Louisiana and 10% to 35% in South Carolina, with Florida running a separate wind mitigation inspection framework on a different scale entirely.

The NAIC's Executive Committee approved development of a Strengthen Homes Act model law on March 25, 2026, charging the Natural Catastrophe Risk and Resilience Task Force with standardizing the processes and metrics behind those discount calculations, certification standards and documentation requirements.

Key Takeaways

  • Four states, four funding mechanisms, four grant structures, so a multi-state homeowners writer faces a different mitigation credit framework, a different actuarial basis and different validation data in each one.
  • FORTIFIED homes showed loss frequency down 55% to 74% against conventional construction in the Hurricane Sally study, with loss ratios down 51% to 72% and claim severity down 15% to 40%.
  • Wind is 40% to 70% of premium in coastal states, so a 30% wind credit is a 12% to 21% reduction in total premium there and far less inland, which is why the base the credit applies to matters as much as its size.
  • More than 20,000 FORTIFIED designations were issued in 2025 alone, against roughly 90,000 cumulative across 34 states and an IBHS target of 120,000 by end-2026, which is where the data becomes credible for portfolio work.
  • Catastrophe models increasingly reflect building-level mitigation themselves, so a separately filed credit on top of a model that already prices the feature counts the same loss reduction twice.

Four Programs, No Common Basis

The model law is not starting from a blank page. It is starting from four working programs that share almost nothing structurally.

State ProgramMax GrantFunding SourceHomes ServedPremium Discount Range
Alabama (Strengthen Alabama Homes)$10,000Insurance industry~53,00020-55% (wind)
Oklahoma (Strengthen Oklahoma Homes)$10,000Insurance industry ($10M/yr cap)~1,000 target FY2026Up to 42%
Florida (My Safe Florida Home)$10,000State budget ($352M FY2025-26)~33,000/yr~$932 avg savings
South Carolina (SC Safe Home)$7,500State budget7,992 total10-35% (wind)

Alabama launched in 2012 and has produced roughly 53,000 IBHS-certified FORTIFIED homes, with grants covering 100% of mitigation costs up to $10,000 per home and funded entirely by the insurance industry rather than the state budget. That funding model aligns the payer with the beneficiary: the same carriers paying in see lower claims on designated properties.

Oklahoma launched in 2025 against severe convective storm rather than hurricane, capped at $10 million a year, and expanded to all 77 counties on January 12, 2026. Early participants reported average annual premium savings near $750, with discounts up to 42%.

Florida operates at a different scale and a different constraint. My Safe Florida Home received $352 million for fiscal 2025-2026, enough for roughly 33,000 homes on a matching structure of $2 state to $1 homeowner up to $10,000. Demand consistently exceeds supply: $200 million was exhausted in two weeks in 2024, leaving 45,000 homeowners in a backlog the proposed 2026-2027 budget addresses with $480 million plus $109 million recurring.

South Carolina has issued $39 million to 7,992 homeowners since inception, at $3,000 to $7,500 per grant depending on tier and income.

The Evidence Is Good Enough to Price; the Base Is Not Settled

The unusual feature of mitigation credits is that the loss reduction is better evidenced than the pricing convention applied to it.

A University of Alabama Center for Risk and Insurance Research study of Hurricane Sally, drawing on an Alabama Department of Insurance data call answered by 86 insurance companies, compared 25,093 conventional homes, 7,685 built to supplemental codes and 7,417 FORTIFIED houses in coastal Alabama. FORTIFIED homes showed loss frequency down 55% to 74%, loss ratios down 51% to 72%, and claim severity down 15% to 40%. Deductibles paid by policyholders fell by more than 60%, and the study estimated total damage in the affected area would have been roughly 75% lower had every home been built to the standard.

Volume has caught up with the evidence. IBHS issued more than 20,000 designations in 2025, a single year exceeding what had previously been multi-year totals, against roughly 90,000 cumulative across 34 states and a 120,000 target for end-2026. At that exposure a carrier can observe outcomes on sample sizes large enough to carry credibility into pricing rather than into a marketing claim.

What is not settled is what the credit multiplies. Most existing credits apply to the wind portion of premium only. In coastal states wind runs 40% to 70% of total premium, so a 30% wind credit is a 12% to 21% cut in what the homeowner pays. Inland, where wind is a smaller share, the identical filed percentage produces a fraction of that dollar reduction. A model law that standardizes the discount percentage without settling whether it applies to total premium, wind-only premium or a peril sublimit standardizes the label rather than the effect.

The related open question is prospective versus retrospective basis. A credit can reflect the expected loss reduction for the individual risk or the observed aggregate reduction across the FORTIFIED book, and the two differ because construction year, geography and roof geometry interact with the standard in ways the aggregate does not resolve.

Where the Credit Is Counted Twice

The complication is that the loss reduction the credit pays for may already be inside the model the rate was built from.

Verisk's AIR, Moody's RMS and CoreLogic models increasingly incorporate building-level mitigation features directly. Where a carrier's catastrophe model already reflects a FORTIFIED roof in the modeled loss cost, a separately filed mitigation credit applied on top of that indication reduces the rate twice for one physical improvement. The NAIC Catastrophe Risk Management Center of Excellence runs regulator training covering catastrophe models and their use in P&C rate filings partly to make that redundancy visible to the reviewer, and the Pre-Disaster Mitigation and Risk Modeling Working Group's charge to analyze how catastrophe models assess risk points at the same seam.

The Center of Excellence's own wildfire work shows how large the modeled effect can be. Rebuilding wildfire-impacted communities to IBHS Wildfire Prepared Home standards could cut projected average annual losses by up to 35% at an incremental construction cost of roughly 3% of project cost. Average annual loss is a direct input to a rate indication, so a 35% AAL reduction is already a rate reduction before any credit is filed.

Underneath both sits a distributional constraint. A credit large enough to change homeowner behavior has to be funded by higher premiums for non-mitigated homes in the same rating territory, which regulators may find hard to approve; a credit small enough to avoid that does not fund the mitigation it is meant to encourage. Isolating the mitigation effect from other rating variables cleanly enough to find the middle requires loss cost data at a granularity that has existed, so far, mainly in Alabama.

And the credit is priced as though the improvement is permanent. FORTIFIED designations expire and require re-inspection, roofing materials degrade, and nothing in current practice establishes how quickly the benefit decays. Alabama requires periodic re-designation and Florida's inspections capture the current state of specific building features; whether a carrier may rely on one inspection or must build re-inspection triggers into the rating algorithm is a certification question the model law will decide by accident if it does not decide it deliberately.

Further Reading