INSURERS PLAN TO LINK HOME RATES TO LOCAL BUILDING CODE ENFORCEMENT

INSURERS PLAN TO LINK HOME RATES TO LOCAL BUILDING CODE ENFORCEMENT

The insurance industry may soon begin to grade local governments on how well they enforce their building code and the results could determine how much homeowners pay to insure their homes, an industry executive said.

Eugene Lecomte, president of the National Committee on Property Insurance, said the industry may be ready to seek state approval for its plan as early as June.If regulators approve, the industry would rate local building departments in much the same way it now grades fire departments. The program could be up and running in two years, Mr. Lecomte said.

People who live in communities where enforcement is lax might then pay more for coverage, if their insurance company pegged its rates to those grades.

"It serves as an incentive," said Mr. Lecomte, who spoke at a hurricane conference in Miami Wednesday. The conference was sponsored by the American Society of Civil Engineers.

The National Committee on Property Insurance also is exploring ways to encourage homeowners to storm-proof their homes. Mr. Lecomte expects more companies to offer incentives to homeowners who do so.

Kate Hale, Metro-Dade County's director of emergency management, also spoke at the conference.

She said insurers could take the lead in making sure home buyers are told how well their home was built and whether it's in an evacuation zone. "They will force us to do what we won't do ourselves."

The insurance industry, which paid out more than $16 billion in claims after Hurricane Andrew, is looking for ways to reduce the damage caused by major disasters - and running into resistance from some in the building industry, Lecomte said.

"We have already felt the heat of some of these organizations," he said. ''We intend to stand up to them."

Insurers already grade communities on their ability to fight fires and policy rates are set accordingly. Code enforcement could be graded in much the same way, Mr. Lecomte said.

The industry also is actively promoting the development of stronger building products - an effort that Lecomte said has triggered opposition among some in the roofing industry.

The industry currently is paying for research on a hail-resistant shingle and Lecomte said the effort likely will be expanded to other products.