NBER Digest highlights incentives for homeowners to reduce insurance risks

The National Bureau of Economic Research has highlighted new research on homeowners insurance premiums in its latest newsletter. The research underscores incentives encouraging homeowners to implement mitigation improvements.

According to Kiplinger, the report focuses on homeowners increasingly paying attention to mitigation as insurers reward resilience upgrades. These upgrades include fortified roofs, impact-resistant openings, and improved anchoring systems. Several states now combine private premium credits with public grants to expedite home upgrades against wind and hail damage. Florida’s My Safe Florida Home program and similar initiatives emphasize practical property-level improvements, aligning with a homeowner-driven approach to controlling costs through resilience.

Dont Goof reported that homeowners who fully recognize resilience upgrades often qualify for significant premium credits. For instance, FORTIFIED designations can lead to substantial wind-portion discounts; South Carolina’s discount sheet indicates savings of approximately 10–35% on the wind component, while general mitigation discounts can reach up to about 25%, depending on verification and insurer participation. These incentives directly link improvements to insurance cost relief.

According to APNews, empirical evidence from Alabama’s Hurricane Sally claims shows that FORTIFIED homes resulted in 55–74% fewer claims and 14–40% lower claim severity compared to non-certified homes. Researchers estimated that if all affected homes had met FORTIFIED standards, insurers could have avoided up to $112 million in payouts and homeowners nearly $35 million in deductibles, demonstrating tangible benefits from targeted home hardening.

Founded in 1920 and headquartered in Cambridge, Massachusetts, the National Bureau of Economic Research is a private nonprofit research organization that disseminates economic research to policymakers, business leaders, and academics. It operates The Digest, a monthly newsletter summarizing recent findings for a broad audience and supports a network of more than 1,800 economists across programs and working groups. Its mission centers on objective, data-driven analysis rather than advocacy.