The Benefits of Modern Building Codes
By Sue C. Quimby, CPCU, AU, CIC, CPIW, DAE – Vice President/Media Editor
It has been 30 years since Hurricane Andrew devastated South Florida – destroying over 25,000 homes, killing 65 people, and resulting in more than $27 billion in damage. The magnitude of the devastation was due in large part to inadequate building codes, faulty construction and improper inspection. Helping clients understand the importance of following proper building codes to reduce and better yet prevent damage, is another value-added service of the professional insurance agent.
In 2020, the Federal Emergency Management Association (FEMA) published a study that focuses on the benefits of updated building codes. The study was done only on buildings constructed since 2000, and addressed losses from earthquakes, flooding and wind. They estimated that, during the years from 2000 to 2040, adoption of modern building codes will result in $132 billion in reduced property damage. FEMA estimates that every $1 spent on mitigation leads to $11 in reduced disaster repair and recovery costs (fema.gov). Modern building codes applied to existing buildings, as well as the impact on codes targeting other causes of loss, such as fire, and life safety considerations, mean even greater potential savings.
There are two model building codes developed by the International Code Council that serve as the basis for all other building codes in the United States. The International Residential Code applies to one to two family dwellings of three stories or less and the International Building Code which is used for all other structures.
Modern building codes benefit individuals and businesses in a number of ways, including reduced operating costs and increased safety. Energy savings due to requirements such as increased insulation and wall thickness leads to reduced operating costs. According to Forbes.com, current building codes represent 30% greater energy efficiency than just a decade ago. NFPA 101 is the Life Safety Code. It addresses methods to improve occupants’ safety by reducing the impact of fire and other hazards in both new and existing buildings. Requirements include emergency lighting, exit lighting, fire extinguishers, sprinklers and fire doors. There are indirect savings as well, such as reduced business interruption when businesses are able to reopen more quickly after a loss.
In addition, insurance costs are reduced and coverage may be more readily available. Credits are available for smoke detectors, alarm and sprinkler systems, and appropriate wind damage mitigation practices such as roof attachment and underlay requirements, and tie downs for mobile and manufactured homes. Building code or ordinance and law coverage is designed to cover the increased costs necessary to rebuild and repair to comply with updated building codes. Compared to the potential reduction in damage, the cost of the improved construction features is low, averaging 1-2% of the total building construction cost (fema.gov).
Disasters such as hurricanes, tornadoes and wildfires can strike anyone, anywhere. Rebuilding is a challenge after any loss. Dealing with the added difficulties that come with widespread destruction can be even more overwhelming. After a disaster, reputable contractors may be hard to find. Some home and business owners may decide to tackle repairs or rebuilding themselves. No matter who does the work, building codes must be followed. In most cases a permit is required. Failure to comply with permitting and building codes can result in fines and may even mean the work has to be taken apart and redone. After Hurricane Andrew, Florida was inundated with unlicensed contractors. Studies showed that more than 60% of the rebuilt roofs did not pass inspection.
There is always room for improvement. Building codes are designed to provide minimum standards to protect the health and safety of occupants. However, they are not universal. As of September 2021, 65% of cities, counties and towns in the United States had not adopted modern building codes. Fifteen states do not have state building codes (upgradedhome.com). Building damage due to fires and natural disasters can be significantly reduced, and life safety increased, when modern building codes are in use. Helping clients manage their exposure is another sign of the true insurance professional.
