Colorado State University researchers are standing by their prediction for a “slightly above-average” 2025 Atlantic hurricane season, while warning of heightened tropical activity over the next two weeks.
Led by Dr. Phil Klotzbach, senior research scientist at CSU and Triple-I non-resident scholar, the team maintains their forecast of 16 named storms, eight hurricanes, and three major hurricanes through November 30. The forecast calls for 115 percent of average hurricane activity compared to the 1991-2020 baseline, a decrease from 2024’s 130 percent. However, the immediate outlook is more concerning, with a 55 percent chance of above-normal activity through August 19.
Current activity includes Tropical Storm Dexter, which formed off North Carolina on August 3 and may strengthen to Category 1 status as it moves into the Central Atlantic. The National Hurricane Center is also monitoring a new system labeled Invest 96L in the Eastern Atlantic. The term “invest” is a naming convention used by the National Hurricane Center to identify a system that could develop into a tropical depression or tropical storm within the next seven days. The designation allows the agency to run specialized computer forecast models to track the area’s potential storm development.
The heightened forecast stems from unusually warm tropical Atlantic waters.
“Weaker winds over the past few weeks have reduced evaporation and ocean mixing, leading to faster warming,” Klotzbach explained. These warmer waters provide more fuel for hurricane development and create atmospheric conditions that favor storm formation.
Major hurricane landfall probabilities remain elevated: 48 percent for the entire continental U.S. coastline, 24 percent for the East Coast, and 31 percent for the Gulf Coast — all above historical averages.
Yesterday’s 8.8 magnitude earthquake near Russia’s Kamchatka Peninsula sent tsunami waves across the Pacific, placing Hawaii under evacuation orders, triggering advisories along the U.S. West Coast, and emphasizing a critical truth about natural catastrophes: They don’t respect borders and tend not to give warnings.
While the immediate impacts were relatively contained—with waves reaching up to 4 meters in Russia’s coastal towns and smaller surges affecting Japan, Hawaii, and Alaska—the event offers a potent and timely reminder about the importance of preparation and investment in resilience.
Coverage Confusion That Could Cost
Standard homeowners insurance policies don’t cover tsunami damage. Neither do earthquake policies, despite the seismic trigger. Tsunami damage falls under flood coverage—a separate policy that many coastal property owners don’t carry.
Flood insurance purchase rates nationally are low – even in coastal communities. This creates a potential perfect storm of financial vulnerability. Communities that experienced evacuation orders yesterday, from Oahu to the Oregon coast might well have been saddled with massive, largely uninsured losses had the tsunami played out differently.
Low Frequency, High Consequence
Tsunami risk represents the most challenging category of natural disasters: extremely rare but potentially catastrophic. Unlike hurricanes or earthquakes that occur with some regularity, major tsunamis affecting U.S. coastlines are generational events. This rarity can breed complacency.
Yesterday’s event, while not causing major damage to U.S. properties, provided invaluable data for catastrophe modelers. The wave propagation patterns, arrival times, and coastal impacts across Hawaii, Alaska, and the West Coast offer fresh insights into how a more severe event might unfold. Insurers and reinsurers are likely already incorporating this data into their risk models.
Building Resilience Through Partnership
The beauty of a “predict and prevent” model of risk management is that it can address a multiplicity of perils. While tsunamis are rare, flooding is not. Recent years have witnessed a rise in inland flooding related to tropical storms, atmospheric rivers, and severe convective storms. The communities affected by catastrophic flood events like the recent ones in Texas and New Mexico and the devastating 2024 floods related to Hurricane Helene tend to have even lower flood insurance “take-up” rates than coastal communities.
The most effective risk management will require unprecedented collaboration between public and private sectors. The NFIP, state insurance departments, and private insurers need to work together on pricing models that accurately reflect risk while remaining accessible to coastal communities. At the same time, communities and businesses must plan and invest together to prepare not just one but many potential climate-related risks.
Devastating flooding in central Texas over the July 4, 2025, weekend highlighted several aspects of the state’s risk profile that also are relevant to the rest of the country, according to the latest Triple-I Issues Brief. One is the rising incidence of severe inland flooding related to tropical storms.
Tropical Storm Barry made landfall in Mexico on June 29 and weakened quickly, but its remnant moisture drifted northward into Texas, according to Dr. Phil Klotzbach, a research scientist in the Department of Atmospheric Science at Colorado State University and a Triple-I non-resident scholar.
“A slow-moving low-pressure area developed and helped bring up the moisture-rich air rom Barry and concentrated it over the Hill Country of central Texas,” Klotzbach said. “The soil was also extremely hard from prior drought conditions, which exacerbated the flash flooding that occurred.”
Such flooding far from landfall has become more frequent and severe in recent years. In Texas – as in much of the United States, particularly far from the coasts – few homeowners have flood insurance. Many believe flood damage is covered by their homeowners’ or renters’ insurance. Others believe the coverage is not worth buying if their mortgage lender doesn’t require it. In Kerr County, where much of the July 4 flooding took place, flood insurance take-up rates through the National Flood Insurance Program (NFIP) were 2.5 percent.
Convective storms, fires, and freezes
But tropical storms aren’t always the impetus for flooding. In July 2023, a series of intense thunderstorms resulted in heavy rainfall, deadly flash floods, and severe river flooding in eastern Kentucky and central Appalachia. The conditions that lead to such severe convective storms also are prevalent in Texas.
Severe convective storms are a growing source of losses for property/casualty insurers. According to Gallagher Re, severe convective storm events in 2023 and 2024 “have cost global insurers a remarkable US$143 billion, of which US$120 billion occurred in the U.S. alone.”
Given its aridity and winds, it should be no surprise that Texas is highly subject to wildfire – but the state also has been increasingly prone to severe winter storms and debilitating freezes. On Valentine’s Day 2021, snow fell across most of Texas, accumulating as temperatures stayed below freezing and precipitation continued through the night. A catastrophic failure of the state’s independent electric grid exacerbated these conditions as snow and ice shut down roads and many homes suffered pipe bursts and multiple days without power.
Texas’s 2021 experience illustrates how grid instability can act as a “risk multiplier” for natural disasters. The entire U.S. electric power grid is increasingly vulnerable as the infrastructure ages and proliferating AI data centers increase demand.
Need for data and collaboration
The severe damage and loss of life from the July 4 flooding have naturally raised the question of whether the Trump Administration’s reductions in National Weather Service staffing contributed to the high human cost of this event. While it is hard to say with certainty, these cuts have affected how NWS works – for example, in its use of weather balloons to monitor weather. As early as April, staffing data gathered by NWS indicated that field offices were “critically understaffed”.
In June, panelists at Triple-I’s Joint Industry Forum expressed concern about the impact of the federal cuts on weather monitoring and modeling, as well as programs to help communities adequately prepare for and recover from disasters. Triple-I has published extensively on the need for insurers to shift from exclusively focusing on repairing and replacing property to predicting events and preventing damage.
Collective action at all levels – individual, commercial, and government – is needed to mitigate risks, build resilience, and reduce fraud and legal system abuse. Triple-I and its members are committed to fostering such action and regularly provide data and analysis to inform the necessary conversations.
Recent developments in the atmosphere over the Caribbean Sea have led researchers at Colorado State University (CSU) to make slight improvements to their hurricane forecast for the 2025 Atlantic-basin season, in an update published Wednesday.
Triple-I non-resident scholar Phil Klotzbach, Ph.D., a senior research scientist in the Department of Atmospheric Science at CSU, and the CSU TC-RAMS research team are now predicting 16 total named storms through the end of the year, a small drop from their original forecast of 17.
“The primary reason for the slight decrease in our outlook is both observed and predicted high levels of Caribbean wind shear,” Klotzbach said. “High levels of Caribbean shear in June and July are typically associated with less active hurricane seasons.”
Klotzbach warned, however, that peak hurricane season – which typically occurs from mid-August through late October – could still be very active, despite current atmospheric conditions.
“The subtropical eastern Atlantic and portions of the tropical Atlantic are warmer than normal,” he said. “The current Atlantic sea surface temperature pattern is fairly similar to what we typically observe in July prior to active Atlantic hurricane seasons.”
Recent efforts to curb federal spending – particularly massive proposed cuts to several major federal science agencies and numerous FEMA grant programs – drew concern from panelists at Triple-I’s Joint Industry Forum in Chicago.
Slated to lose around half of their original budgets, organizations like the National Oceanic and Atmospheric Administration (NOAA) and the National Science Foundation (NSF) provide insurers with much of the research data needed to model climate risks, at no cost to insurers nor the broader public. Abolishing this research, which also enables daily weather and natural disaster forecasting, will increase underwriting costs and those associated with various other industries, including transportation, agriculture, and energy.
“Federal science agencies probably facilitate more economic activity in the country than any other federal agency,” said Frank Nutter, president of the Reinsurance Association of America (RAA). “Fully funding and restaffing those agencies is pretty critical.”
A host of cancelled FEMA mitigation programs have left dozens of catastrophe-prone communities without aid – including projects that were approved before the cuts. Ending the Building Resilient Infrastructure and Communities (BRIC) program, for instance, rescinded approximately $882 million in climate resilience funding — “money we could have spent on mitigation, so we don’t have to spend so much after a disaster,” said Neil Alldredge, president and CEO of the National Association of Mutual Insurance Companies (NAMIC).
Nutter added that “weighing against safety, teacher salaries – all the kinds of things that communities grapple with,” most former grantees lack the resources for “risk reduction or municipal projects and infrastructure” without federal investment.
Population growth in high-risk areas exacerbates the issue, Alldredge said.
“If you look at a map of this country and the population changes from 1980 to today, we have moved the entire population to all the wrong places,” he explained. Building properties capable of withstanding these weather patterns – let alone insuring them – has launched the industry into “a new era of risk.”
While the panelists agreed that opportunities to improve FEMA operations exist, they questioned President Trump’s consideration to disband it entirely by shifting to a state-based relief system.
David Sampson, president and CEO of the American Property Casualty Insurance Association (APCIA), noted that “the very nature of a natural disaster means that it overwhelms the local entity’s ability to respond,” rendering any state-based solution “unworkable.”
“I think we as an industry know where the low-hanging fruit for reforms are,” Sampson continued, because “we interact with FEMA on the ground after disasters.”
State-level legislative momentum
Though the Trump administration’s current plans do not bode well for the future of disaster resilience, insurers celebrated many state legislative wins this year regarding tort reform, notably in Georgia and Louisiana.
“Even at the federal level, there is a growing sense of awareness of the negative impact that an out-of-control tort system is taking on the economy and the American consumer,” Sampson said, highlighting a new bill that would impose taxes on third-party litigation funding.
Florida also successfully resisted challenges to its 2023 and 2024 reforms, which have already helped stabilize the state’s insurance rates and attracted new insurers after a multi-year exodus. Charles Symington, president and CEO of the Independent Insurance Agents & Brokers of America, pointed out that industry advocacy is crucial to tort reform survival.
“Once you get these beneficial pieces of legislation passed,” he said, “we have to fight the fight in every legislative session.”
Symington then contrasted Florida’s recovering market with California’s enduringly hostile regulatory environment, propelled by the 1988 measure Proposition 103.
Insurance Commissioner Ricardo Lara has implemented a Sustainable Insurance Strategy to mitigate the effects of Prop 103 – such as by authorizing insurers to use catastrophe modeling if they agree to offer coverage in wildfire-prone areas – but the strategy has garnered criticism from legislators and consumer groups.
“California doesn’t have the assessment ability like Florida does,” agreed moderator Fred Karlinsky, shareholder and global chair of Greenberg Traurig, LLP. “California is three decades behind.”
As insurers adjust their risk appetite to reflect these constraints, more property owners have been pushed into California’s FAIR Plan – the state’s property insurer of last resort.
“Our members are having to cobble together coverage,” said Joel Wood, president and CEO of the Council of Insurance Agents & Brokers (CIAB), who noted that the FAIR plan’s policyholder count has more than doubled since 2020.
Natural disasters like January’s devastating wildfires underscore California’s need for premium rates that adequately reflect the full impact of these risks, which is essential to the continued availability of private insurance in the state.
“When you have the right leadership in place – the governor, the state legislature – and you have the industry being effective in our advocacy, then we can improve these difficult marketplaces,” Symington concluded.
Identifying key risk trends amid an increasingly complex risk landscape was a dominant theme throughout Triple-I’s 2025 Joint Industry Forum – particularly during the panel spotlighting some of the insurance industry’s C-suite leaders.
Moderated by CNBC correspondent Contessa Brewer, the panel consisted of:
J. Powell Brown, president and CEO of Brown & Brown Inc.;
John J. Marchioni, chairman, president, and CEO of Selective Insurance Group;
Susan Rivera, CEO of Tokio Marine HCC (TMHCC); and
Rohit Verma, president and CEO of Crawford & Co.
Their discussion provided insight into how insurers can transform these uncertainties into opportunities for business development and for cultivating deeper connections with consumers.
Recouping policyholder trust
Given the volatility of the current risk environment – exacerbated by various ongoing geopolitical conflicts and the rising frequency and severity of natural catastrophes – it is more imperative than ever to reaffirm the intrinsic human element of insurance, the panelists agreed.
“That’s one of the most underappreciated aspects of our industry,” Marchioni said. “We make communities safer and put people’s lives and businesses back together after an unexpected loss. Being the calming force when you have unsettling events like this happen around the world is a big part of what we do.”
Yet prevailing public perception continues to indicate otherwise, even as insurers report repeated losses or nominal profits compared to other industries.
“The insurance industry may be the only industry where record profits are a problem,” CNBC’s Brewer added, because consumers tend to “not care whether it’s coming from your investments, or whether it’s coming from your underwriting business or your reinsurance. They just hear that you’re making record profits.”
Brown noted that consumer mistrust derives, in part, from “a very active plaintiffs’ bar,” which the American Tort Reform Association estimates spent over $2.5 billion for nearly 27 million ads across the United States last year. He further discussed how, though the average homeowners’ insurance premium rate in Florida will increase this year, his home state has enjoyed far more stable rates after tort reforms eased litigation costs on insurers.
Previous research by the Insurance Research Council (IRC) – like Triple-I, an affiliate of the Institutes – showed that most consumers perceive the link between attorney advertising and higher insurance costs. Crawford’s Verma, however, emphasized that this awareness does not necessarily translate into consumers understanding their own agency.
“It’s easier for homeowners to understand how the weather impacts potential losses and the fact that weather patterns have changed,” Verma said. “But when it comes to [legal system abuse], I don’t think that connection is as well understood.”
Reflecting on a record high in nuclear verdicts last year, Rivera suggested insurers must reconfigure how they communicate legal system abuse to consumers.
“Where are those hospital professional liability verdicts going to go?” he said. “They’re going to go back into the cost of health care at the end of the day.”
Leading the AI charge
Maintaining consumer centricity while implementing or experimenting with technological innovations – especially generative AI – was a unifying objective for all the panelists.
“We look at AI as an enabler,” Brown said, “so we can put teammates in a position to spend more time with customers, which is the most important thing.”
For Tokio Marine’s Rivera, AI “ultimately helps all of our insureds” by boosting operational efficiency while reducing operational costs, as well as facilitating more proactive risk management than ever before. A growing percentage of insurance executives appear to agree, as generative AI models continue to expedite data processing across the insurance value chain, reshaping underwriting, pricing, claims, and customer service.
Such efficiency, paired with the potential for improved decision-making, is crucial “in our dramatically changing environment,” Marchioni stressed.
“We have thousands of claims every day,” he said. “Thinking about lawsuit abuse as a backdrop – a claims adjuster, every day, has to make decisions regarding, ‘Do I settle this claim based on injuries or venue? What’s the value of the injury and of the claim? Who’s the plaintiffs’ attorney?’ These tools give more refined information so your knowledge workers can make better, more timely decisions.”
Generative AI fails, however, when base datasets are insufficient, outdated, or inaccurate, Brown pointed out. Training AI models uncritically can lead to outputs containing false and/or nonsensical information, commonly known as “hallucinations”.
At their current capacity, at least, AI models cannot draw the kinds of salient conclusions that adjustors and underwriters can, meaning AI could “change the way we work, but it’s not going to replace the jobs,” Verma said.
Though they do not currently exist in the United States at the federal level, AI regulations have already been introduced in some states, following a comprehensive AI Act enacted last year in Europe. With more legislation on the horizon, insurers must help lead these conversations to ensure that AI regulations suit the complex needs of insurance, without hindering the industry’s commitments to equity and security.
A 2024 report by Triple-I and SAS, a global leader in data and AI, centers the insurance industry’s role in guiding conversations around ethical AI implementation on a global, multi-sector scale, given insurers’ unique expertise in analyzing and preserving data integrity.
Insurance industry executives and thought leaders gathered yesterday for Triple-I’s Joint Industry Forum (JIF) in Chicago to discuss the trends, economics, geopolitics, and policy influencing the market today, as well as ways to navigate these complexities while focusing on making their products affordable and available for consumers.
Triple-I CEO Sean Kevelighan in his opening remarks, noted that effective risk management depends on collaboration across stakeholder groups, as interconnected perils “present a community problem, not just an industry problem.”
JIF keynote speaker Louisiana Insurance Commissioner Tim Temple said facilitating community resilience planning is a top priority for the National Association of Insurance Commissioners (NAIC). The NAIC’s 2025 initiative – “Securing Tomorrow: Advancing State-Based Regulation” – aims to improve disaster mitigation and recovery by consolidating “the collective expertise of experienced state regulators from across the country, who can share real-time insights and proven strategies,” Temple said.
Among the initiative’s goals is aggregating more data from insurers to better understand challenges to affordability and availability on state levels, which the NAIC can then translate into actionable policy proposals. Such data calls, Temple said, help regulators, legislators, and policyholders focus on improving the cost drivers of insurance rates.
Louisiana has consistently been among the least affordable states for homeowners and auto insurance, according to the Insurance Research Council (IRC), in part because of its reputation for being plaintiff-friendly in civil litigation. Significant tort legislation has been approved in the state, but resistance to reform remains a challenge.
Getting to the roots of high premiums
After a recent data call in his home state, Temple told the JIF audience, “For the first time in Louisiana, we’re not talking about only premiums. We’re talking about why premiums are where they are.”
A critical lack of transparency surrounding cost drivers persists, however. Temple criticized the National Flood Insurance Program’s Risk Rating 2.0 reforms for not publicly disclosing more information “for individuals and communities to identify and address factors driving up their premiums,” such as “whether increased rates take into account levee systems, pump stations, and other things designed to help mitigate against floods.”
Conversely, government programs like Strengthen Alabama Homes – and the numerous programs it inspired, including in Louisiana – have demonstrated success in communicating the benefits of resilience investments for consumers and policymakers.
“We’re seeing major positive results after just a few short years,” Temple said, noting that, since early 2024, over 5,000 homeowners not chosen for Louisiana’s grant program still decided to invest in the same hazard mitigation, as they may still qualify for the corresponding state-mandated insurance discounts.
“As natural disasters become more frequent and severe, state regulators will continue to drive forward common-sense policies that protect consumers and ensure that insurance remains available and reliable for at-risk communities,” Temple concluded. Developing the database required for such policies is a necessary first step.
Keep an eye on the Triple-I Blog for further JIF coverage.
Rising natural disaster costs, increased home repair expenses, and legal system challenges have made homeowners’ insurance significantly less affordable across the United States over the past two decades, according to new research from the Insurance Research Council. The trend shows no signs of slowing.
The financial burden of protecting one’s home has grown substantially. With homeowners insurance expenditures growing much faster than incomes over the past two decades, American households now dedicate an increasing share of their income to insurance premiums.
In 2001, homeowners typically spent about 1.19 percent of their household income on insurance coverage. This figure climbed to 2.09 percent – a 75 percent increase – by 2022, the most recent available year’s data.
Projections of average premiums from the Insurance Information Institute suggest the trend will continue escalating, with estimates indicating households could spend 2.4 percent of their income on homeowners’ insurance by 2024 – the highest level recorded in more than two decades.
Wide variation by state
Utah emerged as the most affordable state in 2022, where residents spent only 1.00 percent of their income on homeowners’ insurance. Other states offering relative affordability included Oregon (1.09 percent), Alaska (1.23 percent), and Maryland (1.27 percent).
Louisiana ranked as the least affordable, with households dedicating 4.22 percent of their income to homeowners’ insurance. Disaster-prone states dominated the least-affordable rankings, with Florida (3.99 percent), Mississippi (3.87 percent), and Oklahoma (3.45 percent), following the Pelican State.
Multiple Cost Pressures
The affordability crisis stems from interconnected factors that have intensified pressure on insurance markets, according to IRC. Increased natural catastrophe risk represents a primary driver, with weather-related events becoming more frequent and severe.
Rising home construction and repair costs have compounded the challenge. Supply-chain disruptions have inflated material prices and extended project timelines, directly impacting claim settlements. When homes require repairs or replacement, insurers face significantly higher costs than in previous years, necessitating premium adjustments to maintain financial stability.
Population migration patterns have exacerbated risk concentrations, with more Americans moving to areas susceptible to natural disasters, the report noted. Coastal regions prone to hurricanes, wildfire-vulnerable areas, and tornado-prone territories have seen increased development, creating larger pools of exposed properties that insurers must protect.
Litigation has added another layer of complexity. Insurance companies report challenges with fraud, excessive claims, and legal system abuse following catastrophic events. The expense index – measuring what insurers spend to process, investigate, and litigate claims as a percentage of incurred losses – varies significantly across states, with litigation rates affecting overall costs.
By Loretta L. Worters, Vice President, Media Relations, Triple-I
Your roof is more than just a covering over your head. It’s the first line of defense against nature’s most powerful forces.
During National Roof Awareness Week (June 1-7), we spotlight the critical role roofs play in protecting homes, businesses, and communities from severe weather (see infographic) and why building stronger, smarter roofs today is essential for reducing damage and insurance claims tomorrow.
Why roof awareness matters
The roof bears the brunt of wind, rain, hail, fire, and flying debris. Yet, many home and business owners overlook its condition until it’s too late. According to the Insurance Institute for Business & Home Safety (IBHS), a staggering 70 to 90 percent of storm-related insurance claims involve roof damage. Whether it’s shingle loss from 60 mph winds or water intrusion through exposed decking, roof failures can turn a storm into a financial disaster.
FORTIFIED: A better way to build and rebuild
Developed by IBHS after decades of research, the FORTIFIEDstandard is a voluntary construction and re-roofing method that dramatically improves a building’s ability to withstand severe weather. FORTIFIED Roof™ strengthens the most vulnerable parts of a roof, such as edges, decking, and fastening systems, through methods like:
Using sealed roof decks to prevent water intrusion (can reduce damage by up to 95 percent);
Requiring ring-shank nails to secure roof decking more effectively; and
Reinforcing edges with fully adhered starter strips and a wider drip edge.
Many upgrades are affordable. A sealed roof deck can cost as little as $600, and switching to stronger nails might cost under $100 for a typical 2,000-square-foot home. Roofs built to the FORTIFIED standard not only protect what matters most; it can also lead to significant insurance discounts in states like Alabama, Oklahoma, and Mississippi. These programs are making roof resilience accessible and cost-effective for homeowners and businesses alike.
“It only takes one storm to turn a minor vulnerability into major destruction,” said Roy Wright, IBHS president and CEO. “At IBHS, we’ve spent decades studying how buildings fail—and how they survive. That research led to the FORTIFIED Roof standard, a proven way to reduce storm damage. It’s affordable, accessible, and one of the smartest investments a homeowner can make for peace of mind and protection.”
Why It Matters to Insurers
Insurers are increasingly focused on roof resilience because it reduces the number and severity of claims. The FORTIFIED Roof standard is part of a broader industry shift from “detect and repair” to “predict and prevent.”
Poorly maintained or outdated roofs can result in denied claims, higher premiums, or non-renewal of policies. Conversely, resilient roofs may qualify for preferred coverage, lower deductibles, and better insurance options.
“A resilient roof isn’t just a safeguard for a single structure,” said Triple-I CEO Sean Kevelighan. “It’s a smart strategy for reducing risk across entire communities. As frequency and severity of natural disasters rise, insurers are increasingly focused on proactive solutions like the FORTIFIED standard. These improvements help protect property, minimize costly disruptions, and ensure insurance remains available and affordable for more Americans.”
Roofing in wildfire and hurricane zones
Roofs are also vulnerable to wildfire embers, especially in areas where debris can ignite on the roof surface. For wildfire-prone regions, following IBHS’s Wildfire Prepared Home standard and local fire-safe roofing recommendations is critical. Likewise, in hurricane zones, strong connections between roof components can prevent catastrophic failures when wind forces attempt to peel roof decks away.
Replacing or upgrading a roof is one of the most important investments you can make to your property. And thanks to resources like the Roofing Roadmaps from IBHS, homeowners and business owners can make informed decisions about materials, maintenance, and upgrades that will pay off in both resilience and reduced risk.
A study by the Alabama Department of Insurance, in collaboration with the University of Alabama Center for Insurance Information and Research, shows that widespread adoption of IBHS FORTIFIED construction standards could dramatically reduce insurance claims from hurricanes, while also encouraging property/casualty insurers to maintain coverage in high-risk areas.
Homes built or retrofitted to FORTIFIED standards from the Insurance Institute for Business & Home Safety were found to have suffered far less property damage and a lower volume of insurance claims from Hurricane Sally — which made landfall in Gulf Shores, Alabama, as a Category 2 storm in September 2020 — than non-FORTIFIED properties.
“The results show mitigation works and that we can build things that are resilient to climate change,” said the author of the study, Triple-I non-resident scholar Lars Powell.
A collective effort
Alabama’s proactive approach – which includes mandatory insurance discounts and a state-backed grant program for resilient construction – offers a model for risk mitigation and protecting homeowners from catastrophic winds of tropical cyclones.
“Alabama was an early adopter of FORTIFIED designations for wind loss mitigation,” the report says. “In 2025, there are more than 53,000 FORTIFIED houses in the state,” out of approximately 80,000 nationwide.
The state grants and insurance discounts have been a big motivator for homeowners to make the investment. Lawmakers in other hurricane-prone states, such as Louisiana, are looking to Alabama’s strategy as they seek solutions for predicting and preventing losses from increasing natural disaster risks.
