Stormproofing the Future

Recent hurricanes have shed light on the need for more resilient homes, and on modular’s potential for delivering them.

• Building codes historically evolve after disasters, but programs like FORTIFIED help builders exceed code minimums, while also lowering homeowners’ insurance premiums.
• State-level programs are making it possible for people in high-risk areas to get insurance and to qualify for these programs.
• Modular construction aligns perfectly with FORTIFIED standards thanks to repeatable, factory-controlled processes and easier quality assurance. In fact, some modular builders are already on board.

When Hurricane Helene made landfall on September 26, 2024, it recorded sustained winds of up to 140 mph. Over 220 people lost their lives in this weather event and over five million people were evacuated from areas along the Gulf Coast.

According to the National Oceanic and Atmospheric Administration and the National Hurricane Center, Helene’s total damage is estimated at $78.7 billion, with most of it in Florida and North Carolina. That makes it the 7th-costliest tropical cyclone on record in the United States.

These numbers are leading insurance providers to pull out of high-risk areas. For instance, an April 2024 ClickOrlando.com story reported that Progressive was dropping 1000 Florida homeowners, and that was several months before Hurricanes Helene and Milton hit the state.

These storms raise some questions. How can we minimize risk for both homeowners and insurers? And how can we better mitigate the damage from these events?

Some Code History

Building codes give us part of the answer. Codes have been with us for a while and are usually spurred on by a realized, or potential, catastrophe.

As early as the 1600s, cities like Boston, Mass. adopted “building acts” to prevent entire cities from burning to the ground.

The National Electrical Code (NEC) was first introduced in 1897 by the National Board of Fire Underwriters in response to several electrical fires. The resulting guidelines sought to  provide education on safe design, installation and inspection practices, as well as address risk, and protect people and property from electrical hazards.

In 1901, The Tenement House Act strove to improve the horrendous living conditions for tenement tenants in New York City. The law required landlords to install indoor plumbing, better ventilation and lighting.

And, of course, the Miami-Dade County wind codes, put in place after Hurricane Andrew in 1992, require that structures be designed to withstand wind speeds of up to 175 mph or more, depending on location and building height.

Miami-Dade is a bit of an outlier, though: most codes aren’t that strict. Reducing losses from future natural disasters requires us to consider other sources of advice. That’s where code-plus construction comes in.

A Higher Standard

Code-plus refers to construction practices that go above and beyond the minimum requirements of the local building code. This standard is usually focused on the requirements of a resilient construction program, and homes that meet these requirements may qualify for insurance premiums.

One example of such a program is the FORTIFIED Home program from the Richburg, S.C.-based Insurance Institute for Business & Home Safety (IBHS), a 501(c)(3) nonprofit scientific research and communications organization supported by property insurers. It’s administered via FortifiedHome.org. The program is designed to strengthen both new and existing homes against severe weather events — like hurricanes, high winds, hail and tornadoes — by exceeding typical building codes

The program works well with modular construction. Fred Malik, Managing Director at FORTIFIED, was a homebuilder for 20 years before his move to IBHS. When it comes to meeting program requirements, he recognizes the advantage modular homebuilders have over site builders. He says a factory production environment is tailor-made for the program because of its repeatable processes. “There are real advantages when it comes to quality control on the line,” he says. “A lot of the work needed to make a home more robust [can be done] in the plant, in a controlled environment, in a very systematic way.”

IBHS even offers a Modular Home Designation Toolkit on its website; a 20-page PDF with detailed instructions for modular homebuilders wishing to navigate the process of becoming a FORTIFIED-approved factory. They also offer a foundation retrofit guide for manufactured homes built to HUD Code.

Regardless of construction method, foundations must be capable of resisting the design wind load requirements with no more than ¼ inch lateral deflection.

A trained and certified evaluator must also inspect the house at specific points in the building process for it to receive the FORTIFIED designation. Additional inspection and/or third-party verification is generally required to authenticate the completed work, allowing the homeowner to obtain insurance discounts.

Can You Even Get Insurance?

A study from online lending platform LendingTree.com, published in March 2025, revealed that almost 14% of owner-occupied homes in the US are without insurance.

Louisiana, Mississippi, Alabama and Florida are all rated high-risk states for hurricane exposure, according to FEMA’s National Risk Index, yet these states rank in the top 10 for the highest percentage of uninsured homes.

One problem is that options seem to be shrinking. Insurance rates are regulated by most states, and even the rates for reinsurance — insurance for insurance companies that spreads risk across more than one entity, lessening the financial burden on a single company — are limited by state regulators. (The size of the reinsurance market is predicted to grow to $1.3 trillion, according to Spherical Insights, a market research firm based in Mason, Ohio.)

As states block private insurers’ ability to adjust rates according to the risk in a particular area, they are electing to discontinue business in select states, or refusing to renew coverage for many homeowners in high-risk areas. As a result, many states are seeing FAIR (Fair Access to Insurance Requirements) plans growing at a disproportionate rate. FAIR plans are state-mandated programs that provide insurance to homeowners and businesses who are unable to obtain coverage from private companies because of high-risk factors such as location to extreme weather events. According to news website stateline.org, as of January 2025, 34 states and Washington, D.C. offered such plans.

Help for the Uninsurable

North Carolina has built what many consider to be a successful alternative, which may offer a model for other states.

The North Carolina Rate Bureau (NCRB) is the organization responsible for setting standard rates for insurance policies in the state. The NCRB also provides a “consent to rate” option where a policyholder can agree to a private insurance company raising their premium above the standard rates set by the NCRB.

For high-risk homeowners who don’t quality for conventional insurance, residual market insurance providers are able to add a percentage to the standard rate, allowing homeowners to obtain insurance where they otherwise would not qualify for private insurance.

Insurers of last resort include NC Joint Underwriting Association (NCJUA), a FAIR Plan provider for North Carolina and NC Insurance Underwriting Association (NCIUA), a Coastal Property Insurance Pool. NCIUA is available to residents of the state’s 18 coastal counties while NCJUA covers the remaining counties. These organizations only cover wind, not flood, events, however, which became problematic for many homeowners affected by flooding in inland areas of North Carolina during Hurricane Helene.

Gina Hardy, CEO of both NCJUA and NCIUA, says her groups are constantly looking at ways to ensure North Carolina residents have access to insurance. One innovative step they took was to secure the world’s first Resiliency Catastrophe Bond, a financial instrument designed to finance projects that enhance resilience against natural disasters or catastrophic events.

“We go to traditional reinsurance markets and investors and we sell a securities-type feature called a Catastrophe Bond,” she says. “[Our goal is that] in any given year, there will be about $5.5 billion that we can access really quickly.” If there aren’t any losses, the money can be invested into resiliency measures. “This had been talked about in academic literature for about ten years, but no one had actually brought a bond to market [until we did].” Hardy’s groups are also working with foundations and organizations such as the Robert Wood Johnson Foundation, a national philanthropy based in Princeton, New Jersey, to make grants available to homeowners wanting to improve resiliency in their homes through programs such as FORTIFIED.

Assuring Insurers

In Alabama, state law requires insurance companies to provide discounts to homeowners with homes that earn the FORTIFIED designation. As of early 2025, Alabama leads the nation with more than 50,000 FORTIFIED designations.

Risk-adverse insurers want data that can prove the benefit of participating in the program, and that data has become available. The University of Alabama, Smart Home America (a Mobile, Alabama-based nonprofit that provides disaster resilience education and technical assistance) and RenaissanceRE Risk Sciences (a global property and casualty reinsurer) recently released a third-party evaluation of the program’s efficacy.

Titled Performance of IBHS FORTIFIED Home Construction in Hurricane Sally, the study showed that FORTIFIED-designated construction “reduced loss frequency by 55% to 74%, loss severity by 14% to 40%, and loss ratio by 51% to 72% in Alabama after Hurricane Sally.” It was based on a review of more than 40,000 insured properties threatened by Hurricane Sally, a Category 2 storm that hit the Southeastern United States in 2020.

The study estimates that building to the FORTIFIED Gold level with new construction will increase building costs by 0.5% to 3% (or 6% to 16% for retrofitting an existing home to FORTIFIED Roof standards). Additionally, appraisals on homes built to the FORTIFIED standard were shown to appraise 7% higher than homes without the designation.

Grant programs can also support resiliency progress. One of these is Strengthen Alabama Homes (SAH), a grant program through the Alabama Department of Insurance. It provides grants to residents “for residential wind mitigation on existing, owner-occupied, single-family homes,” and issues grants to homeowners to offset the cost of reroofing their houses to the FORTIFIED Roof standard. It’s funded by the state’s insurance industry and is not tied to the state’s general budget or to a federally funded program.

To date, SAH has paid nearly $86 million to retrofit homes to the FORTIFIED Roof standard. It recently announced they will be offering $10,000 grants in Jefferson, Tuscaloosa and Escambia counties of Alabama to fortify roofs using certified, qualified contractors.

Offsite’s Role

So where does offsite have an opportunity to help with rebuilding and mitigation?

Rob Howard, President of Howard Building Science, a General Contracting company based in Granite Falls, N.C. is under contract with Cardinal Homes, a modular homebuilder based in Wylliesburg, Va. to manufacture a home in their North Carolina facility to FORTIFIED standards. The home is currently in production, and should be set and finished in August 2025.

But it took Howard five years to find a modular partner. The process was time-consuming, even with many connections within the offsite space.

“For a small builder-developer, I think it’s a little bit harder to get [a factory’s] attention. But I went on a factory tour and sent [Cardinal Homes] my specs for the Zero Energy Ready Home Program (ZERH) and they didn’t balk at anything, like some other factories had done.”

Howard wanted his first prototype to be built to FORTIFIED standards and as luck would have it, Cardinal Homes was already in the process of building a FORTIFIED home for another client in coastal South Carolina, so they were familiar with the process. He is hoping to use the same design for his next 16-home project in North Carolina.

In addition, the design may be used in a 44-unit resilient and energy efficient development planned for Hildebran, North Carolina — all built using offsite methods. The Hildebran development is a project in partnership with ADL Ventures, a mission-driven, clean infrastructure innovations firm, based in Boston, Mass.

“We’ve been talking to a few modular manufacturers and panelized manufacturers to incorporate the FORTIFIED specs into our designs,” says Ankur Dobriyal, Director of Offsite at ADL Ventures.

For modular homebuilders who serve coastal communities that are regularly hit by hurricanes and other weather events, there is an opportunity to both partner with states and programs to provide homeowners with resilient homes, and to create opportunities for insurance providers to offer discounts to homeowners.

Heather Wallace is a freelance writer and industry engagement specialist with over two decades of experience in various areas of the building industry. She has covered topics on construction, technology, workforce development, green building, and sustainable living.