(The Center Square) —Louisiana property insurers would be required to offer premium discounts to homeowners who install fortified roofs under a new regulation being developed by the Louisiana Department of Insurance.
The discounts would apply to new or renewed residential property insurance policies issued on or after Jan. 1, 2027.
The new rule comes as fortified roofs have become increasingly popular in Louisiana amid high homeowners insurance costs. According to the department, 4,688 grants have been awarded through the Louisiana Fortify Homes Program, and the state is nearing 5,000 grant-funded fortified roofs. Overall, there are roughly 12,000 fortified roofs in Louisiana, including about 7,000 installed outside the state grant program.
The department said the state’s grant program, launched in late 2023, has helped raise awareness of fortified construction as homeowners look for ways to lower insurance costs.
The discounts would generally apply to the wind and hail portion of a homeowner’s premium rather than the entire premium. The amount could vary by insurer, region and level of mitigation, with some discounts potentially ranging from about 9% to 25%, depending on actuarial data.
“Once these are in place, homeowners will be able to go look and say, “Okay, I live in X parish, which is in Central Louisiana, and I have a fortified roof, so the benchmark discount for that is X percent,” John Ford told The Center Square, “and then compare it to what their insurer provides. They’ll see whether their insurer is hitting that benchmark or not.”
The department’s proposed benchmark table is broken into three regions, north, central and south Louisiana, and by mitigation level. The most common level is FORTIFIED Roof, the designation used in the state’s grant program. Higher levels include FORTIFIED Silver, which adds protections such as stronger openings for doors, windows and garage doors, and FORTIFIED Gold, which reflects a more comprehensive fortified standard.
The benchmark discounts were developed by the National Association of Insurance Commissioners using Louisiana-specific data and two hurricane catastrophe models. The models examined representative Louisiana single-family homes with different levels of mitigation, then adjusted the results by region and insurer expense assumptions.
In other words, if a fortified roof is expected to reduce hurricane damage, a homeowner’s insurance bill should reflect that lower risk.
Insurers would be required either to meet the benchmark discount or submit actuarial data to the department showing why a smaller discount is justified. The department has not yet consulted with insurers on the proposal, though Ford said that is expected soon.
The exception would not be based on whether a company can afford the discount, but whether its data shows a lower reduction in risk than the benchmark assumes.
For example, if the benchmark discount were 20%, but an insurer’s actuarial analysis showed a fortified roof reduces risk by only 10%, the company could seek approval for a lower discount.
The department is still going through the rulemaking process, which will include public comment and input from insurers, consumers and other stakeholders before the regulation is finalized.
