Property Loss: Climate Change or Building Codes?
I saw a headline stating that Florida building codes are at the root of Florida's property insurance problems. I doubt that building codes are the root of the problem, but are they a contributing factor?
Prior to Hurricane Andrew that wiped buildings clean of their foundations for miles, Florida's building codes were weak. Considerable angst was expressed among all concerned parties regarding the inadequacy of Florida's building codes. The state's politicians, to their credit then, worked with knowledgeable construction and engineering experts to develop much tougher building codes which, of course, increased building costs. From what I see and hear and based on the claims incurred, while no hurricane as destructive as Andrew has since struck Florida, the homes built to those new codes have generally withstood the storms.
Instituting even tougher building codes now could also help, but frankly, fixing the litigation issues in Florida are far more important.
Building codes, however, should not be ignored relative to climate change. A good portion of Miami is in visible danger as a consequence of rising waters. Tougher building codes could address the problem. However, a different coding issue is perhaps more important. Waters are rising because some of the land is sinking due to the over pumping of ground water which is a regulatory issue and a building code issue regarding the regulation of water sources. It is not a climate change issue.
In California, wildfires are not necessarily or even primarily a climate issue. Building codes are the issue. California acquiesced to builders who wanted to build homes close together. When the wildfires struck, the fire spread from home to home to home. The loss of so many homes is an apt illustration of not learning the lesson of the Great Chicago fire of 1871 and Mrs. O'Leary's cow. Build wood buildings next to each other, too closely, and when one goes up in flames, the others go too. The adequate spacing of buildings is important and fixing that issue does not require the population to stop burning fossil fuels.
Another example of a building code issue is that wood fences provide a trail for a fire to spread. That fix is simple enough. Override the homeowners association's rules and force metal fencing by outlawing wood fences. Leave the wood and save some trees in order to further mitigate climate change if that is of concern to insurance commissioners who worry about how climate change is a danger to the insurance industry.
Around 25 years ago in Colorado, shake shingles and cedar siding were banned in new construction within many wildfire zones. That code makes complete sense. It is a commonsense solution regardless of whether climate change is a factor in the wildfires.
Another wildfire issue is allowing grass to grow too tall in urban parks. When fire hits, it spreads rapidly through the tall, dry grass. Tall dry grass has always existed west of the Mississippi and has always caught fire. Historically, the grass was knocked down by grazing animals, whether buffalo or cows or both. Also, Indigenous people set fires to protect and cultivate the land. To pretend that tall grass fueled fires are a climate change issue is baloney. Mow or graze the grass.
Climate change is such a convenient excuse for incompetency and now COVID is being used as an excuse in the same way. I saw a report from a carrier stating their numbers were wrong because of COVID. I don't think people understand how ridiculous they sound when they use climate change or COVID as an excuse for the failure to use simple math and logic.
From an insurance coverage perspective, if regulators use common sense to address these problems, agents had better be aware of how inadequate most ordinance and law throw-in coverage is today. Rebuilding to new codes will cost far more than the 10% most carriers give away. In fact, if your local building codes have materially changed already, 10% is likely inadequate. Have this discussion with your insureds and offer them increased limits as they almost certainly need more coverage.
While it may take forever to address weak building codes and perhaps even longer to convince those who religiously believe that reversing climate change, rather than learning how to mitigate the impact of the inevitable, is the solution, you can build your organization and better protect your clients through basic risk management recommendations.
Suggest that your insureds use metal to build their fence, if allowed, install an underground electric fence, or use fire resistant materials. Or, clear ground around the house. Perhaps they should live where the municipality is not causing the land to sink or at least not allowing it to sink. They could move to a place where some space exists between buildings. If your insureds are planning upgrades to their homes, suggest that they use more fire resistant materials such as replacing their roof with metal roofing material. Metal may not be the homeowner's ideal material but at least you gave them great advice. If they live next to tall grass, and are not allowed to cut it, suggest they move or take extra precautions.
There is a house in southern California that survived a wildfire about 30 years ago. Dozens of homes all around that home burned to the ground, but not that house. The owner had taken precautions because he knew he could not control his neighbors' actions and his voice was not going to be heard by the local politicians or building department. I will bet that no one, upon rebuilding, followed his example.
You can lead a horse to water but you can't make it drink.
NOTE: The information provided herein is intended for educational and informational purposes only and it represents only the views of the authors. It is not a recommendation that a particular course of action be followed. Burand & Associates, LLC and Chris Burand assume, and will have, no responsibility for liability or damage which may result from the use of any of this information.
None of the materials in this article should be construed as offering legal advice, and the specific advice of legal counsel is recommended before acting on any matter discussed in this article. Regulated individuals/entities should also ensure that they comply with all applicable laws, rules, and regulations.