As residents and businesses continue to recover after Hurricanes Harvey and Irma, focus is beginning to turn to mitigation. In Florida, where experts say better buildings codes resulted from Hurricane Andrew 25 years ago, analysis will include how improved codes helped buildings fare during the storm. In Texas, where there is no statewide code adoption mandate, discussion will focus on what can be done to improve building codes.
During a recent Verisk Monday Web Seminar Series, Christopher Miller, technical coordinator for BCEGS, Commercial Underwriting at ISO, explained the Building Code Effectiveness Grading Scheduled (BCEGS) and its development.
Due to high loss events in the early 1990s, namely Hurricane Andrew in 1992 followed by the Northridge Earthquake in 1994, BCEGS was developed and modeled after ISO’s Public Protection Classification program – a program, in place for more than 100 years, that evaluates community fire protection.
The program is considered a cooperative effort between the government and the insurance industry, he explained. Insurers were asked to point out “what mattered in terms of resilience of buildings, as well as what mattered from a loss standpoint and actuarial risk from the insurance industry.”
Explained simply, Miller said there were building codes on the books in many jurisdictions, but just as many were not enforced. For example, building codes might require hurricane straps and clips but, upon inspection, they were found to be missing or fastened incorrectly.
The program reviews the codes adopted and measures the resources and support available for enforcement of the code. It drills down to individual code enforcement personnel, their experience, education and hours spent inspecting buildings. The data, Miller emphasized, is field verified – it isn’t just mined off the internet or obtained through a phone conversation. Today, there are close to 1300 data points.
The objective of BCEGS is to improve the enforcement of building codes which, according to Miller, will lead to better catastrophe-resistant buildings and reduced insurance losses. He explained that insurers also get a better idea of the risks they are undertaking in the policies they choose to write. To date, the program has collected more than 43 million individual data elements. Its classification covers 87 percent of the U.S. population, Miller said.
The minimum criteria for inclusion requires that a permanent building department be in place for the community with an adopted building code or standard with regularly scheduled training, structural plan review and field inspections. It is assigned a rating of 1-10 and the rating is typically updated every five years. Personal and commercial/industrial lines are rated separately. Miller explained there are three major areas of review based on a 100-point scale: administrating of codes (54 percent), preview of building plans (23 percent), and field inspection to make sure construction follows the building plans (23 percent). The score begins at zero and builds up from there, he added.
Miller explained that while the program is voluntary, there are some consequences for not participating in it. For example, the state of Florida charges communities a 1 percent premium surcharge that opt out of participating in the program.
The results are used as data in Federal Emergency Management Agency (FEMA) reports and the program is written into two of three hazard mitigation programs.
According to Miller, academic studies established a correlation that better ratings translated into lower losses. In one by the Wharton School at the University of Pennsylvania, windstorm losses were reduced by as much as 72 percent as a result of the implementation of statewide codes in Florida.
Community Ratings 1-10 Explained
Classes 1-3 – Comprises 21 percent of participating communities nationwide. Those that score within this class have an unamended, adopted model code that is within five years of its publication date; exceptional staffing levels based on workloads with high level certification and education.
Classes 4-6 – Comprises 58 percent of participating communities nationwide. Those that score within this class have an adopted model code, but have strained staffing levels and minimal levels of staff education and certification.
Classes 7-10 – Comprises 21 percent of participating communities nationwide. Scoring within this class range means a community has an adopted model code, but it has been amended to weaken it and/or has older codes, in addition to inadequate staffing levels, education and certification.
In light of hurricanes Harvey and Irma, Miller discussed Texas and Florida’s BCEGS ratings based on 2015 statistics.
Texas – Its BCEGS state average is 58 commercial (out of a score of 100) with a class 5 and 54 residential with a class 6. (Figures don’t include communities that don’t have a department).
Florida – Its BCEGS state average is 78 commercial with a class 3 and 72 residential with a class 4.
Comparing state mandates, Miller said that while both have building codes, Texas allows amendments which can weaken codes while Florida does not. In Florida, building inspector certification is mandated and must be updated every two years with a required amount of training. Texas doesn’t require building inspector certification. Building contractor licensing (includes training and exam requirements) and registration is also mandated in Florida, but not in Texas. Lastly, in Texas, where there is no statewide code adoption mandate, communities can decide to adopt and enforce building codes.
While Miller couldn’t speak to how losses from Harvey and Irma could impact building code change, Julie Rochman, president and CEO of the Insurance Institute for Business & Home Safety (IBHS), said that early indication is the areas that did have enforced codes sustained in less damage.
“I don’t think there’s anybody – including homebuilders or public policymakers, given they may not be huge fans of codes – who were saying that codes didn’t matter in these storms. I also have not heard anybody say that houses that weren’t built to code did better. I hope it is one of those moments that crystallizes for consumers the need to be more involved and to ask for, to agitate for, to advocate for strong, well-enforced building codes. It’s a really important topic for community continuity,” Rochman said.
After Harvey, IBHS sent a team of engineers to the coastal areas in Texas to examine damage patterns.
In 2015, IBHS issued a report rating residential building codes in hurricane-prone states. Not surprisingly, the findings mirror BCEGS findings – Florida building codes are substantially better than Texas’. Florida scored 94 out of 100, while Texas scored 36.
While the report, Rating the States, will be updated next year, Rochman said Texas isn’t likely to gain a much higher score. The Texas legislature convenes every other year and won’t be in session in 2018, making it less likely building codes will remain top of mind for public policymakers, she added.
“There is sort of like a time and space element to disasters and what people learned and follow through on,” said Rochman. “The farther away in time you get from a disaster, the less likely people are to do anything to actually enact the lessons that are learned.”
For example, she said it took Louisiana two years to adopt building codes after Katrina.
“That was a defining event for New Orleans and Louisiana in a way that Harvey was not a defining event for coastal Texas,” Rochman said.
That’s because, for the most part, Harvey was mainly a flood event. She expects, in Houston especially, that discussion will center on codes related to building elevation and land use.
“In Texas, they’ve been building in places they shouldn’t have been building, from a flood perspective, and they have just created so much impermeable surface and there is just nowhere for the water to go,” Rochman said.