Planet Money
00:24:22 · S3, S0, Alexi Horowitz-Ghazi, S5
Ad[00:24:22] S3: Stay tuned for the following announcements and messages from our sponsors. This message comes from LinkedIn. Owning a small business comes with a lot of challenges and means juggling multiple things at once. It's even harder to do it efficiently. But with LinkedIn, you get all the tools you need to grow in one place. With LinkedIn, simplify your sales, marketing, and hiring so that you can actually run your small business. Learn more at linkedin.com/planetmoneyshow. Ad[00:24:49] S0: This message comes from Ameriprise Financial. Chief market strategist Anthony Saglimbeni shares how Ameriprise financial advisers help clients reach their goals through personalized advice. Ad[00:25:00] S2: It starts by just asking questions, learning their financial well-being, their dreams, and then you can take that and start applying it to creating an investment portfolio that's designed to meet those goals. Ad[00:25:14] S0: For more information and important disclosures, visit ameriprise.com/advice. Securities offered by Ameriprise Financial Services LLC, member FINRA, and SIPC. Ad[00:25:25] S5: NPR Plus is a great way to support independent journalism. But did you know it also saves you time? Over a year of fresh air, NPR Plus listeners can save more than seventeen hours with sponsor free episodes. As a thank you for your support, get more NPR in less time, plus bonus content and dozens of other sponsor free shows. Sign up today at +.npr.org.
00:25:25 · S5, Alexi Horowitz-Ghazi, Ann Cope, S0
Ad[00:25:25] S5: NPR Plus is a great way to support independent journalism. But did you know it also saves you time? Over a year of fresh air, NPR Plus listeners can save more than seventeen hours with sponsor free episodes. As a thank you for your support, get more NPR in less time, plus bonus content and dozens of other sponsor free shows. Sign up today at +.npr.org. [00:25:52] S2: When I visited the insurance industry's destruction lab in South Carolina a few months ago, I got to see all the catastrophic research programs in action and to find out what they've learned from all this high octane experimentation. Experimentation. IBHS chief engineer Ann Cope took me on a little tour of destruction. There was, of course, the giant hangar for lighting houses on fire or blasting them with wind and rain. But outside the facility, there were even stranger sites. Ann points to a curious cluster of disembodied roofs standing on stilts in the distance. It's something they call the roof aging farm. [00:26:26] S1: Those are asphalt shingle roofs just sitting out here in the nice South Carolina sun, and we're watching what's happening to those shingles over time. [00:26:33] S2: Ann says the plan is to leave them out there in the elements for as long as twenty years. [00:26:37] S0: You're just waiting for them to ripen? [00:26:39] S1: Well, that's the kind of stuff that we're studying here. [00:26:42] S2: Periodically, some samples from those roofs are also harvested, and yes, that is the technical term, and then brought into a different part of the research campus.
00:26:42 · Alexi Horowitz-Ghazi, S0
[00:26:42] S2: Periodically, some samples from those roofs are also harvested, and yes, that is the technical term, and then brought into a different part of the research campus. [00:26:50] S0: Welcome into the Hail Lab. This is where we do all of our hail impact testing on building materials. [00:26:56] S2: Hail scientist Jake Sorber explains that parts of those roofs are then mounted on a wall and turned into targets for artificially manufactured hailstones of varying density and speed. [00:27:05] S0: Hail is actually being made right now. It looks like he's about ready to be done with this specific rod.
00:27:10 · Alexi Horowitz-Ghazi
[00:27:10] S2: These lab grown hailstones are then shot out of a cannon. We're gonna shoot in three, two, one. Wow. The hail team then examines the piece of roof they just pelted using a three d scanner. And Jake says this kind of research addresses a growing problem for the insurance industry. See, before 2008, hail was a relatively small line item on insurance loss profiles, often averaging below a billion dollars a year. But in 2008, hail losses started to climb dramatically. These days, hail damage can cost insurers tens of billions of dollars, and the choice of shingles that somebody uses on their house could mean a difference of tens of thousands of dollars in damages. So now, in part because of this kind of hail lab research, insurers can evaluate their coverage decisions according to which shingle somebody has, and builders and homeowners have more information about whether fancier shingles might be worth it for lower insurance and repair costs. Chief engineer Ann Cope tells me the destruction lab has discovered all sorts of news you can use. For instance, they've tested out different building techniques for how much wind driven rain might leak into your attic during a hurricane and found that adding an extra layer of relatively cheap waterproofing to your roof, sealing the deck, that could prevent up to 95% of that kind of damage. Ann says these techniques have already made a big difference in communities where they've been implemented at scale. Take the state of Alabama. Insurance regulators there offered direct grants to homeowners to fortify their roofs to an IBHS standard to prevent wind and rain from getting in. They mandated insurance company discounts for people who installed them. And over 50,000 people in Alabama have fortified their roofs and says it's already helped homeowners there.
00:28:51 · Ann Cope, Alexi Horowitz-Ghazi, S0
[00:28:51] S1: Hurricane Sally comes across right in the same area where all of this fortified development had occurred, and the IBHS fortified roofs were the ones that were in great shape. People were still in their homes. Neighbors who did not have a fortified roof had tarps, had damage, had water, and the fortified roofs were the ones that kept the community together. It's a triple win. [00:29:17] S2: A triple win, Ann says, because a roof with less damage means less disruption for an individual homeowner, more people are able to stay in the community after a major storm, and less damages for the insurance companies to pay out. As for what homeowners can do to defend their homes against wildfire, that gets us back to the experiment I'd come to the destruction lab to witness, what I like to call Exodus three four or the experiment of the burning bushes. Shareenie Munroy is the wildfire researcher charged with executing that experiment. [00:29:48] S0: We have been doing this many times, maybe 50 so far. We have another 50 to go, at least. [00:29:56] S2: How many bushes have to die before you're satisfied? [00:29:59] S0: Oh, it's what we have to pay to understand how these things behave. Right?
00:30:04 · Alexi Horowitz-Ghazi
[00:30:04] S2: It's through research like this that the industry, along with communities around the country, have settled on the idea that one of the single most important ways of hardening a home against the threat of wildfire is by limiting the flammable material within five feet of the house, creating a sort of defensive perimeter. And this particular defensive technique is now even being mandated for millions of people. Individual towns and counties, even the state of California, have adopted this idea into their building codes. And some insurance companies have made it a requirement in order to qualify for coverage. IBHS has a whole list of other recommendations for homeowners living in places with a high risk for wildfires. Homeowners can limit embers sneaking into their attic and lighting the house on fire by replacing their vents or adding much smaller metal mesh. They've also found that wooden fences can act sort of like a wick in a wildfire, spreading the blaze from home to home in a neighborhood. So swapping wood fences out for metal ones can make it less likely the fire will spread. Unfortunately, the scientific consensus here is that in order to significantly reduce a home's risk of burning down, you really should do all of this stuff, which is something a lot of people simply can't afford to do. Now, IBHS is trying to incentivize homeowners to do everything by offering a certification called wildfire prepared. When a homeowner gets that certification, it should, in theory, signal to insurers how much work they've put into mitigating potential losses, And ideally, it might translate to lower premiums. But I've been reporting on the world of wildfire and insurance for a few months now and talked to a lot of homeowners dealing with this issue in California, which is facing some of the most extreme and expensive wildfire risk. And I found that some communities that are trying to follow IBHS's new building standards to the letter of the law are still struggling with skyrocketing insurance premiums. Some homeowners have seen price increases of almost a thousand percent, or they've gotten dropped from their insurance altogether. I ask IBHS's Ann Cope about this. How do