Later this summer, a journal article Jeff Czajkowski of
Wharton and I co-authored will appear in Land
Economics. But a shorter version of
the research was published last week in Visualize,
an insurance industry publication. The
link to the article is here:
We were interested to see if better enforcement of building
codes could translate into lower damage when a hazard strikes a community. The hazard we studied was hail, which is one
of the costliest hazards for insured losses.
To determine the degree to which building codes were enforced we used
the Building Code Effectiveness Grading Schedule (BCEGS) which is administered
by the Insurance Services Office (ISO). Damage
data came from two sources, industry level damage from ISO and exposure level
damage from Travelers Insurance. We
found that the difference in insured losses between communities with the higher
ratings and those with no rating was a reduction in losses of about 20%.
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