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A residual property insurer and regulators in two Southeastern states are emphasizing roof integrity, more signs that mitigation and prevention are increasingly recognized as ways to reduce insured losses as storms escalate in frequency and severity.

“The goal is to make the risk a better risk, so the private market may desire to write that risk,” said Gina Hardy, CEO of the North Carolina Insurance Underwriting Association, which provides residual coverage for vulnerable coastal areas in the state.

The association, also known as the Beach Plan, announced in late 2024 that it is now offering grants up to $10,000 for homes on the Outer Banks to install new roofs that meet the Institute for Business and Home Safety’s Fortified standard.

Previously, the association has provided a number of roof-grant programs that allow premium discounts for policyholders. But some of those were only for properties already damaged by storms. The preemptive funding plan takes it a step further.

“It helps build a more stable insurance market here,” Hardy said.

The standard allows shingle roofs but requires stronger edges, requires the underlying decking to be sealed and fastened with better-holding ring-shank nails.

Many states across the Southeast now offer some type of wind-mitigation program for similar improvements. Florida’s My Safe Florida Home program, for example, provides matching grants up to $10,000 for retrofitting that installs stronger roofs, windows, doors and roof-to-wall connections. But that is funded mostly through state tax dollars.

The North Carolina association’s Outer Banks program’s funding comes chiefly through the association’s own surplus accounts, a path that no other residual property insurer has followed, Hardy said.

She acknowledged that a monster storm season could force the NCIUA to reduce the grant funding. But so far, that has not been an issue: In 2024, even with Hurricane Helene, the association was able to add $245 million to its surplus, she said. And this year, allowing for two average-size storms, officials expect to add another $330 million.

That and the roof-grant funding has been possible in part due to more favorable reinsurance prices for the association. Hardy said association officials made a business case to reinsurers, showing that stronger roofs mean lower loss costs for insurers. She cited research that suggests that fortified roofs can produce a 35% reduction in claims and a 22% reduction in losses on claims that are filed.

But surplus-borne funding can only go so far, and the association wants to take it to the next level. North Carolina lawmakers have provided at least $9 million for strengthening programs in recent years, but association officials are now asking for continuous funding –by allowing the NCIUA to keep what it annually sends to the state in premium tax collections. That money would be used to fund roof and mitigation programs for years to come. So far, the idea has been favorably received by a few Democrats and Republicans in the General Assembly, Hardy said.

Another idea the association is hoping to see become reality: Hardy said a bill has been introduced in Congress to waive federal income taxes on the mitigation grants, which could provide another incentive for homeowners to keep stronger roofs over their heads.

“We think this is right thing to do because of the proven nature of reducing claims and reducing future insurance costs,” Hardy said.

Meanwhile, other states have continued to recognize the importance of mitigation. The South Carolina Department of Insurance said it will begin accepting applications this week for its wind-mitigation program. The SC Safe Home Grant Program provides non-matching grants up to $7,500 and matching grants of $6,000 for Fortified roof improvements, the DOI said in a bulletin.

Smaller grants can help fund hurricane shutters, protective barriers and window replacements.

And in Florida, Insurance Commissioner Michael Yaworsky has generated considerable with his call for reduced use of asphalt shingles on roofs. In a recent interview with Insurance Journal, Yaworsky said that Florida law requires insurers to offer discounts for wind mitigation work, and his office this year will place a new emphasis on making sure carriers provide premium credits for homes that utilize roof materials that are tougher than shingles.

A metal or concrete roof could be a hard sell to most homeowners, despite HO premiums that have doubled in some parts of the state. As recently as 2022, asphalt shingles covered more than 70% of Gulf Coast homes, according to a report by Arturo. And the up-front costs of metal roofs can be 65% higher than the cost of shingle roofs, Roofing Contractor .

Florida lawmakers also may be asked to help on the mitigation front. The Legislature, which convenes in March, is expected to consider renewing millions of dollars in funding for the My Safe Florida Home wind-mitigation program and the My Safe Florida Condominium pilot program, both of which have proven to be exceedingly popular with property owners over the last two years – so much so that the plans quickly ran out of state funding.

The matching grants in years past cover only up to $10,000, so would likely have less of an impact in encouraging more-expensive, non-shingle roofs.

Topics Mergers & Acquisitions Windstorm