Over the last 20 years, the number and severity of natural disasters has risen considerably in the United States. The U.S. government has paid almost $1 trillion for disaster recovery in that time.
The problem has become so urgent that public officials and leaders in the insurance industry say that more needs to be done in the area of disaster mitigation. They are calling for the public and private sectors to work more closely together to prepare for disasters, as well as to provide incentives to make homes and businesses better able to withstand natural disasters.
There are many different kinds of incentives that can be used to encourage people to take better precautions against disasters. They include actions such as building permit rebates, tax incentives at the state level, and state and federal grants. Government incentives are important, but the insurance industry needs to step up as well to provide additional encouragement, insurance officials say.
For example, insurance companies can offer discounts to people who enhance their structures against natural disasters, as well as offering services in helping those who have reinforced their structures.
Studies have shown that reinforcing structures is a very effective way to reduce damage from natural disasters. But up until now, most of the money for natural disasters has been spent on repairing and rebuilding after the disaster has struck.
Some organizations contend that model building codes and more stringent construction standards will go a long way toward reducing the destruction from natural disasters. These business and consumer organizations are pushing for states to adopt building code standards, and for incentives to get builders to use them. Model building codes are minimum standards for the design, planning and construction of homes and buildings. The purpose of the codes is to make sure the buildings are safe and sturdy.
There is a good deal of proposed legislation to provide incentives for states and builders to adopt model building codes. One piece of legislation, providing incentives to states, would increase the amount of federal funds for disaster recovery by 4 percent – if the state adopted the model codes. The legislation would actually have the effect of reducing the amount of disaster relief money needed because buildings would be more secure and less likely to suffer major damage from natural disasters.
Other proposed legislation offers different kinds of incentives – a tax-free savings account for homeowners to use for making structural improvements to their home, and tax credits to businesses and homeowners who rebuild their places using model building codes.