Will Louisiana speed up adding fortified roofs to offset high home insurance prices?

While Louisiana lawmakers have struggled to rein in rising home insurance premiums, one solution can both lower costs and make homes more resistant to hurricane damage: fortified roofs.

Now, lawmakers appear poised to pass some bills that are expected to accelerate the pace at which stronger roofs are put on homes.

A plan to give homeowners a $10,000 tax credit if they pay for a fortified roof has gained momentum this legislative session, which ends June 12. So has a bill to require local governments to permit new roofs, which can help to verify if they're built to correct standards. And some lawmakers are pushing to set up a dedicated funding source for a separate and popular state grant program where people enter a lottery to receive $10,000 grants to build fortified roofs.

The moves are aimed at a lofty goal: Building higher roof standards on a critical mass of south Louisiana homes — thought to be 25% of the housing stock.

But disagreements have emerged among lawmakers over how to best encourage enough homeowners to re-roof their houses to better standards. Many residents can't afford those improvements in a state with lower incomes and higher premiums than most of the country.

Some of those concerns caused lawmakers to sideline a bill that would have required roofs in coastal Louisiana to be built to fortified standards — a set of building practices that requires paid evaluations from the Insurance Institute for Business & Home Safety, a trade group that established the program.

For the second year in a row, Republicans on the Senate Insurance Committee killed a proposal to require insurers to deliver a minimum discount to homeowners who get a fortified roof.

And citing budget concerns, lawmakers on the House Appropriations Committee rejected HB 663 to set up a new fund to build stronger roofs in coastal Louisiana. The fund would have come from a portion of sales taxes paid in south Louisiana in the two months after a major hurricane.

"The faster we can fortify these roofs, the faster we can return to normalcy," said Rep. Gabe Firment, R-Pollock, who sponsored the bill.

'It's working'

Fortified roofs use several basic measures to make shingles less likely to blow off, including better nails and stronger edges. Roofers are required to tape down the seams, making water less likely to pour into a home even if the roof blows off it.

Homes with fortified roofs were 56% less likely to have an insurance claim after Hurricane Sally than normal roofs, according to the Center for Risk and Insurance Research at the University of Alabama. Homes that were built to an even higher standard, fortified "gold," were 70% less likely to have those claims.

But when Hurricanes Laura and Ida ripped thousands of roofs off Louisiana homes in 2020 and 2021, the state had no grant program or widespread campaign to inform residents about it. That meant roofs rebuilt after the storms were generally not built to the higher standard.

Now, Louisiana is racing to try to retrofit roofs by doling out grants, though demand so far has far exceeded the amount of money the state has to give out. And lawmakers are close to passing a bill by Sen. Kirk Talbot, R-River Ridge, to give residents who pay for a fortified roof on their own a $10,000 tax credit.

The move would represent a significantly better incentive than the current $5,000 tax deduction, though Talbot's bill would be capped at $10 million a year across the state, limiting the number of people who can benefit. The cap, put in place over budget concerns, means 1,000 homeowners will be able to get the tax benefit outside the grant program. More could qualify if some roofs on smaller homes cost less than $10,000.

Talbot has said that putting fortified roofs on homes is the only way south Louisiana is going to remain insurable long-term. He brought the tax credit to incentivize homeowners to get the roofs without waiting for the state grant program, which doesn't have enough capacity for everyone seeking a grant. And he said he's confident lawmakers will support the bill, though it still has several steps to go. It needs approval from the House tax-writing and possibly budget committee, as well as the full House, before being sent to the governor.

"It's working," Talbot said. "It's a great program. This just allows people who can front the money to put the roof on to get the tax credit later."

Discount debate

Many residents reported to the Louisiana Legislative Auditor that they saw significant savings on insurance premiums after getting a fortified roof. The savings are particularly large when people move from Citizens — the expensive, state-backed insurer of last resort — to a private carrier.

Louisiana modeled its fortified roof program after Alabama, which sets a 20% discount bench mark that an official with Smart Home America, a nonprofit that advocates for fortified roofs, recently testified is met by all participating insurers there. But Louisiana didn't include a mandated or bench mark discount.

State data shows most insurers in Louisiana still offer a significant discount on homes with fortified roofs, with many offering savings of 20% to 30%. But several insurers only offer meager discounts, sometimes as low as 5%.

Sen. Royce Duplessis, D-New Orleans, sponsored legislation to require insurers to offer significant savings in exchange for the roofs. But Republicans on the Senate Insurance Committee rejected the bill amid opposition from Insurance Commissioner Tim Temple and the insurance industry, who argued it would push insurers away.

The audit found the median homeowner saved 22% on their insurance premiums. But Duplessis noted the data came from a survey that asked homeowners to recall their insurance premiums before and after, rather than comparing the actual premiums.

Duplessis said he's concerned that insurers who offer low discounts are holding back the program from gaining momentum and encouraging homeowners to put stronger roofs on voluntarily.

"We know there are instances where people are not getting discounts," he said during the hearing on his bill. "And they're telling their neighbor they're not getting a discount."

Gov. Jeff Landry said in December he supported requiring such discounts, saying he was disappointed that a package of pro-industry bills Temple pushed last year had not yet produced meaningful reductions in premiums. But Landry, who has not offered a package of bills to alleviate the homeowners insurance crisis, didn't officially support Duplessis' bill.

Temple subsequently issued a bulletin reminding insurers they are required to submit "actuarially justified" discounts for fortified roofs.

Mandated roofs?

Louisiana's code technically requires all roofs to be built to nearly the same standard as fortified roofs. But many parishes have no way of verifying whether that's the case because they don't require permits or inspections for new roofs.

That's changing in some parishes, including Orleans, which followed in the footsteps of Jefferson Parish recently by requiring permits for new roofs.

A bill by Rep. Foy Gadberry, R-West Monroe, would require it statewide. The bill made it through the House and is awaiting action in the Senate.

But lawmakers will not require new roofs to be built to fortified standards, after Rep. Aimee Freeman, D-New Orleans, shelved her bill amid opposition from homebuilders and others concerned with higher costs for homeowners. Freeman said she is working on a substitute bill.

Dan Mills, head of the Homebuilders Association of Greater New Orleans, said recently he supports fortified standards, but noted many residents don't have the foundation type required to get them. He said he wants to see the state boost participation in wind mitigation surveys, where a surveyor verifies that a home has certain roof standards that make hurricane damage less likely, often resulting in insurance savings.

"Fortified is a great thing in our state," Mills said. "We are opposed to mandating fortified. We already have the codes."

In the meantime, the Legislature appears likely to keep the same level of funding as last year for fortified roof grants, $15 million. The Legislature sent $30 million to the program in 2023, enough for 3,000 homeowners.

Temple is asking lawmakers to dedicate $15 million a year in insurance premium taxes and fees to the fortified roof grant program, which has seen demand far outstrip available funding. Until now, lawmakers have been sending money from the state budget to fund it.

"This is a direct benefit back to the taxpayers," Temple said.