A Cost-Benefit Analysis of FORTIFIED^TM Home Designation in Oklahoma

Somik Ghosh
Ben F. Bigelow
Alexander Smith
Olayinka Omole
University of Oklahoma

Natural disasters such as hurricanes, tornadoes, and thunderstorms with high winds and hail occur worldwide. These disasters bring a proportional amount of strife in the forms of injury, property damage, and loss of life. Homeowners can take measures to protect their properties and interests, but at an additional cost, one of which comes from the Insurance Institute for Business & Home Safety (IBHS). It is FORTIFIED^TM home designation, which is a collection of construction requirements regarding certification and designation. This study sought to identify the cost associated with meeting FORTIFIED home standards, then investigate its return on investment. Depending on a homeowner’s financial approach, some levels of FORTIFIED home designation have a return on investment even if a natural disaster does not occur; however, it is not universal.