By: Frank Came
Part One of the Designing the Future Series examined the emerging emphasis on passive survivability in the design of homes, businesses, and infrastructure. In Part Two, we explored the many real-world impediments that could hinder the attainment of greater resiliency. One of the barriers, namely Building Codes, was examined in Part Three of the Series.
Part Four extends the analysis of Building Codes and related factors and shows how the insurance industry is promoting resiliency in design and construction.
One of the sad realities of post-disaster recovery is that homeowners or businesses discover they may no longer have access to insurance coverage or must pay much higher premiums. This can limit or prevent them from refinancing to recover or repair their homes or other assets. This can prove devastating to those who have already suffered from the impacts of extreme weather or other disasters.
This situation is changing. In 2026, insurance companies are no longer passive observers of building codes; they have become the primary “enforcers” of the resilient future. As climate-driven losses reached record highs in 2025 (with US storm losses alone hitting $93bn), insurers are reacting with a “carrot and stick” approach.
Here is how the insurance landscape is shifting in response to new building codes and other measures that promote greater resilience in the design and construction of buildings and infrastructure.:
1. The “Carrot”: Premium Refunds and Rate Locks
Insurers are desperate to reduce the volatility of their claims. To do this, they are offering significant financial rewards for buildings that exceed basic code.
The 25% Refund Rule: Major mortgage insurers (like Canada Guaranty and Sagen) now offer a 25% premium refund for homes certified under high-performance codes like the BC Energy Step Code or Built Green Gold/Platinum.
Fortified Resilience Credits: In the US, companies like State Farm and Liberty Mutual provide substantial discounts (often up to 20-30%) for structures meeting the IBHS FORTIFIED standard, which requires reinforced roof systems and impact-resistant glass beyond standard code.
Parametric “Speed-Pay” Policies: Some insurers are piloting programs where, if a building meets a specific seismic or flood-proof code threshold, a claim is paid out automatically via text message once a disaster sensor is triggered (e.g., California’s Jumpstart program), bypassing months of inspection.
2. The “Stick”: The Rise of “Uninsurability.”
If a building is only built to “minimum” code in a high-risk area, it is increasingly becoming a financial liability.
Managed Retreat from “Code-Minimum”: Reinsurance giants like Munich Re and Swiss Re are warning that properties in high-risk zones (fire-prone hills or floodplains) are becoming “uninsurable” regardless of code, unless they implement “defensible space” and regenerative landscape architecture.
The “Protection Gap” Surcharge: In areas with outdated codes, insurers are either pulling out entirely (as seen in Florida and California) or applying a “Legacy Risk Surcharge.” Essentially, you pay a penalty for living in a building designed for 20th-century weather.
3. Parametric Insurance: The “Speed-Pay” Incentive
New “parametric” policies incentivize resilience by removing the uncertainty of the claims process.
How it works: Instead of waiting for an adjuster, the policy triggers an automatic payment (e.g., $10,000 via text message) as soon as a local sensor records a specific flood depth or wind speed.
The Incentive: These policies are often only available or affordable for buildings that have documented resilience features, such as elevated electrical systems or flood-proof basements, which ensure the “speed-pay” funds can be used for rapid recovery rather than total rebuilds.
4. High-Resolution “Risk Engineering” Data
Insurers now use Geospatial Intelligence (drones and satellites) to verify construction quality in real-time.
Verification Incentives: Architects who provide “Digital Twins” or transparent engineering data rooms can negotiate better deductibles and higher coverage limits.
Conversely, “data-poor” buildings or those in high-risk zones that ignore nature-based defenses (like mangroves or fire-breaks) are facing a “Protection Gap Surcharge” or outright lack of insurability.
“Build Back Better” Clauses Modern policies are shifting from “replacement cost” to “resilient replacement cost.”
Resilience Upgrades: If a structure is damaged, new 2026 policy clauses often provide extra funds (up to 20% above the insured value) specifically to upgrade the building to a higher resilience standard than it had before the loss.
Standardizing Recovery: Insurers are lobbying for an industry-wide “Build Back Better” standard to ensure that every repair reduces the likelihood of a future claim.
5 “Insurance-Friendly” Resilient Building Checklists
To secure the best rates in 2026, architects must provide a “Resilience Dossier” to underwriters during the design phase.
A. Moisture & Water Management (The #1 Timber Risk)
[ ] Real-Time Sensors: Moisture sensors embedded in CLT panels to detect leaks before they cause rot.
[ ] Active Drainage: Temporary roofing or “wet weather” construction cycles to prevent panels from soaking during assembly.[ ] Compartmentalization: Water-tight floor seals to prevent a single burst pipe from damaging the entire vertical structure.
B. Fire & Structural Integrity
[ ] Calculated Charring: Engineering reports proving a 2-hour fire rating through “sacrificial” char layers (Mass Timber).
[ ] Redundant Suppression: Enhanced sprinkler systems with independent water tanks (allowing for “Islandable” function).
[ ] Seismic Dampers: Use of “low-damage” connectors that can be replaced individually after an earthquake rather than condemning the building.
C. Climate Adaptability
[ ] Forward-Looking Data: Design based on 2050–2070 climate projections (flood/heat) rather than historical “100-year” data.
[ ] Passive Survivability: Documented ability to maintain internal temperatures below 26°C for 72 hours without power.
In summary, the insurance industry has moved from being a reactive “payout” mechanism to an initiative-taking “risk engineer.” Faced with rising catastrophe losses, insurers are now using financial levers to force or fund the adoption of resilient architecture. In effect, they are providing a pathway for ensuring our tomorrows.
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Frank Came is the Communications Director for the Pacific Northwest Building Resilience Coalition. He can be reached at franktcame@gmail.com
