When homeowners across the country opened their insurance bills between 2021 and 2024, they found premiums had risen an average of 24% – adding an estimated $21 billion in total costs nationally, according to a report by the Consumer Federation of America. The increases reflected a grim reality: American homes are more vulnerable than ever. But higher premiums, industry leaders and policy experts say, do not make them any safer.
The broader picture is stark. Severe convective storm losses – hail, tornadoes and straight-line winds –exceeded $50 billion for the third consecutive year in 2025, with roof damage alone accounting for an estimated 70 to 90% of insured residential catastrophe losses. Every dollar spent on hazard mitigation, researchers say, saves up to $33 in disaster costs – a ratio that has sharpened urgency inside insurance boardrooms and state legislatures alike.
"If we look at charging everybody $100 and the losses are $150, which they have been in some recent years, we're not collecting enough money, so we have no choice but to raise premiums," said Don Griffin, senior vice president of policy and research at the American Property Casualty Insurance Association. "That's not the way our industry wants to work."
Since 2015, the price of tools, hardware, and building supplies has risen more than 29 points on an indexed basis driven sharply upward by pandemic-era supply chain disruption, while household insurance costs have climbed a comparatively modest 19 points over the same period.
Source: U.S. Bureau of Labor Statistics, CPI-U, series CUUR0000SEHM01 and CUUR0000SEHD. Annual averages calculated from monthly values (2026 based on Jan–Apr). Index: Jan. 2015 = 100.
The alternative gaining traction across the country is physical risk reduction – hardening homes against fire, hail and wind before disaster strikes, rather than pricing for losses after it does.
"We have to stop looking at insurance solutions," said Carole Walker, executive director of the Rocky Mountain Insurance Information Association. "We really need to start looking at risk-reduction solutions."
Walker's state has become an unlikely laboratory for this approach. Colorado leads the nation in hail insurance claims and ranks second for homes in high wildfire-risk areas – a combination that has concentrated minds among lawmakers and insurers alike. This spring, the state legislature passed legislation to fund home-hardening grants. Proponents estimate the measure could save policyholders an average of $800 per year in premiums.
The challenge is scale. Of roughly 148 million housing units in the United States, an estimated 116 million were built before the year 2000 – before the era of modern building codes, according to Michael Newman, head of public policy at the Insurance Institute for Business and Home Safety, a nonprofit research organization funded by the property insurance industry.
"The vast majority of our homes in this country were not built with modern approaches to improving life safety," Newman said. "We're not built to withstand today's weather." New construction matters, he added, "but the risk lies with the existing housing stock."
Newman frames the institute's mission around two goals: survivability – keeping families in their homes and communities economically intact after severe weather – and insurability, which translates survivability into lower costs and broader market access.
The state that has traveled farthest down the risk-reduction path is Alabama, and its results are providing the insurance industry with its most compelling proof that the approach can work at scale.
A peer-reviewed study released this year by the University of Alabama's Center for Risk and Insurance Research, commissioned by the state's Department of Insurance, examined more than 40,000 insured properties struck by Hurricane Sally, a strong Category 2 storm that made landfall in Gulf Shores in September 2020.
The findings were striking. Homes built or retrofitted to the FORTIFIED standard –a set of resilience criteria developed by the institute – suffered at least 55% fewer claims than conventionally built homes, and as many as 74% fewer at higher designation levels. The average dollar amount paid per claim fell by 15 to 40%. Researchers estimated that if every home in the storm's path had met the baseline FORTIFIED Roof standard, insurers would have saved $105.6 million in losses – rising to $116.1 million had homes met the top-tier Gold standard.
The ripple effects have been felt in neighboring states. Louisiana, which launched its own home-hardening program in 2023 following Alabama's example, found that homeowners who upgraded to FORTIFIED standards saw an average annual premium reduction of 22% – with more than a quarter saving $2,000 or more per year. The Louisiana Insurance Department in April 2026 went a step further, requiring every property insurer in the state to offer mandatory FORTIFIED premium discounts by January 2027.
"It's important because it's no longer a theoretical exercise," said Richard Johnson, public affairs director at the Insurance Council of Texas, which is studying Alabama's model ahead of the state legislature's next session. "Hurricane Sally gave us a real-world test with actual claims data."
Texas, where hail is the single largest cost driver for property insurers, is essentially starting from scratch on mitigation standards. Outside coastal requirements for wind and hurricane resistance, no statewide standards govern hail or wildfire mitigation across most of the state – even as more than 7.9 million Texas properties face moderate or greater hail damage risk, with a combined reconstruction cost value of $3.1 trillion. "We need to be able to mitigate the risk and bring those costs down," Johnson said. "That's our number one claim that insurance companies are paying out on right now."
Newman argues that the most durable risk reduction happens when resilience standards are embedded in building codes rather than left to individual homeowners. The record there is discouraging: fewer than 35% of Americans live in communities that have adopted a modern building code, according to the institute's 2024 rating of state building code systems. Not a single state has adopted a statewide building code since 2008. In their absence, local jurisdictions are left to act on their own, often without the resources to do so.
Insurance Institute for Business & Home Safety · Rating the States, 5th edition · 2024
Building code strength by hurricane-coast state
Score out of 100: adoption, enforcement, and contractor licensing. Dot shows 2012 score; arrow shows direction of change.
Source: IBHS Rating the States 2024 (ibhs.org/public-policy/rating-the-states). Scores compiled by Insurance Information Institute. The report covers the 18 Atlantic and Gulf coast states most vulnerable to hurricanes; inland states are not scored.
A new joint framework published by the Institute and the American Property Casualty Insurance Association in March 2026 sets out science-based home hardening and defensible space standards –including a noncombustible zone within five feet of structures – designed to give insurers a consistent, verifiable basis for incorporating mitigation into underwriting models and premium pricing. More than 20 states have already accepted AI-driven wildfire and hail models in rate filings, reflecting a broader shift toward property-level risk analytics.
Consumer awareness compounds the problem. Most homeowners do not understand what drives their premiums, and many still view resilience investment as an upfront cost rather than long-term protection. One factor that could shift that calculus: a study in Alabama found that homes with FORTIFIED designations sold for roughly 7 to 8% more than comparable properties – a financial return that could reframe the decision, particularly for homeowners who plan to move within a decade.
"We have to help owners understand why a fortified roof is meaningful," Newman said. "We have the programs, but we're fundamentally also about education –communicating both the risk and the solutions to reduce it."
