How Arizona State University Advances Disaster Preparedness Through Resilient Construction and Insurance Incentives in the USA

The Growing Need for Resilient Housing Across the USA

Nearly every year, the United States sets new records for the human and economic toll exacted by natural hazards. According to data documented in the Spatial Hazard Events and Losses Database for the United States (SHELDUS), the trend in disaster-related losses points consistently upward. Society pays enormous sums to rebuild after hurricanes, tornadoes, wildfires, and heat waves, yet far too often, the reconstruction process simply bakes the same vulnerabilities back into the built environment. Far too little is invested upfront in making homes more resilient against the next inevitable catastrophe.

Addressing this critical gap requires a fundamental shift in how communities, policymakers, and the private sector approach building standards and risk management. Researchers at Arizona State University are currently leading a high-profile initiative to examine how financial mechanisms—specifically insurance incentives, subsidies, and tax credits—can be structured to encourage resilient construction and significantly improve disaster preparedness across the USA.

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Analyzing the Disconnect in Modern Home Construction

One of the primary drivers of escalating disaster losses is a fundamental disconnect between the parties involved in creating and occupying residential housing. Developers and home builders operate on tight margins and are often less interested in investing in hazard-resilient construction than the actual inhabitants of the home or the broader community.

The majority of the existing housing stock in the USA was built to outdated, minimum-standard building codes. These codes historically overlooked critical hazard-specific requirements, such as prescribing how high off the ground a home should be elevated to avoid future flood damage, or precisely how strong a roof must be to withstand extreme wind speeds. Because these safety features are largely invisible behind drywall and under shingles, builders have little incentive to include them. Home buyers, meanwhile, have been conditioned to value visible amenities like square footage, premium appliances, and granite countertops over structural hardening.

What appears to be a “cheap” or “affordable” home at the time of purchase often proves otherwise in the long run. When future reconstruction costs, displacement, and the loss of personal property are factored in, the true cost of vulnerable construction becomes devastatingly clear. Changing this dynamic requires intervention that aligns the financial interests of builders and homeowners with the goal of long-term structural safety.

Arizona State University’s Approach to Wind Disaster Risk

To find practical, scalable solutions to these challenges, a team of researchers from Arizona State University, in collaboration with Louisiana State University, was selected for the prestigious AXA and Swiss Re Joint Risk Resilience Partnership Award. This partnership specifically supports top-tier risk research aimed at finding smarter ways to increase community resilience, improve disaster preparedness, and ensure communities build back better after a catastrophic event.

The 18-month project, titled Insuring for Resilience: Strengthening Disaster Preparedness and Post Catastrophe Reconstruction, focuses intensely on wind disaster risk. The research team is examining how insurance incentives and government cost-sharing mechanisms can encourage homeowners to retrofit and harden their houses against windstorms without bankrupting insurers or draining public funds.

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Understanding the Computable General Equilibrium Model

At the core of this research is a sophisticated region-specific computable general equilibrium (CGE) model. Led by Petar Jevtic, an associate professor of actuarial science at Arizona State University’s School of Mathematical and Statistical Sciences, the model treats insurers, homebuilders, households, and government as one interconnected economic system.

Principal investigator Melanie Gall, a hazards geographer and associate professor who co-directs the Center for Emergency Management and Homeland Security at ASU’s School of Public Affairs, frames the policy context. By inputting various economic scenarios, the researchers can simulate different combinations of insurance premium discounts, government subsidies, and tax credits. The model then outputs data on insurance uptake, safer building investments, broader economic performance, and the financial stability of insurers. This allows the team to identify exactly which policy combinations are most effective and preferable for different stakeholders.

Leveraging Insurance Incentives for Disaster Preparedness

Wind damage is uniquely well-suited for this type of economic analysis because the engineering link between specific retrofits—such as reinforced roofing materials, stronger roof-to-wall connections, and impact-resistant windows—and the losses they prevent is well established and easily quantified. When a home is structurally strengthened, it generates fewer insurance claims after a storm. This allows residents and communities to recover much faster, reducing the external shocks to the broader economy.

The goal of the Arizona State University team is to deliver concrete, evidence-based guidance to policymakers regarding the available policy mixes and their associated costs. They are exploring public-private partnerships designed to keep insurers in the market and profitable, while simultaneously keeping insurance accessible and protective of households, particularly those that are most vulnerable to financial ruin following a disaster.

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Case Study Focus: Louisiana’s Insurance Crisis

To ground their economic model in real-world conditions, the researchers selected Louisiana as the focal geographic region. Louisiana is one of the most wind-exposed states in the USA and has suffered repeated, catastrophic hurricane landfalls. Today, the state sits at the absolute center of the insurance availability crisis. Major insurers are exiting the market, premiums are spiking, and homeowners are struggling to maintain coverage.

Having increasing numbers of residents forego homeowner’s insurance creates a nightmare scenario for disaster recovery, as it eliminates the primary private financial source for rebuilding. There is a persistent myth that federal disaster assistance will step in to make disaster survivors whole. In reality, federal aid focuses heavily on public infrastructure and public sector recovery. Even homeowners who possess insurance are frequently underinsured following a major event. Maintaining robust insurance coverage—whether public, private, or a hybrid—is essential to ensure that communities can physically and economically recover.

Adapting the Framework for the Southwestern USA

While the initial model focuses on wind hazards in Louisiana, the framework is deliberately designed to be portable. The economic structure allows researchers to swap in any region’s local economic data and adapt the policy levers to that region’s specific hazards.

Arizona and the broader Southwestern USA face their own escalating environmental perils, particularly wildfire and extreme heat. The core question remains exactly the same: How do you structure insurance and public incentives to drive resilient construction in a cost-effective manner? Once the Louisiana wind model is fully validated, adapting it to Southwestern hazards is a natural next step for the Arizona State University team, bringing the research directly back to their home state.

Practical Steps for Homeowners and Policymakers

While the economic modeling continues, there are immediate steps that both individuals and local governments can take to advance disaster preparedness in the USA. Insurance accessibility and affordability can only be achieved when homeowners, neighbors, and the community at large commit to risk reduction. Breaking the costly cycle of rebuilding that drains household savings, public budgets, and insurer reserves requires proactive measures.

• Educate Yourself on Local Hazards: Platforms like HazardAware.org, developed by members of the ASU research team, allow users to educate themselves about local risks to residential property. The platform includes a mitigation calculator that computes how long it takes for specific risk reduction measures to pay for themselves through avoided damages and lower premiums.
• Prioritize Structural Hardening: Homeowners should prioritize retrofitting strategies such as upgrading roof deck attachments, installing hurricane straps, reinforcing gable ends, and using impact-resistant glazing. These targeted improvements offer the highest return on investment during severe wind events.
• Advocate for Modern Building Codes: Policymakers must move beyond minimum-standard codes and adopt hazard-specific building requirements that account for future climate projections, not just historical weather data. Strong code enforcement is equally critical to ensure that new construction actually meets these elevated standards.
• Support Risk-Based Insurance Incentives: Encourage local representatives to explore premium discount programs and tax credits that reward homeowners who invest in resilient construction. These financial tools help offset the upfront costs of retrofitting.

Share your experiences in the comments below regarding home retrofitting and disaster preparedness.

Moving Forward with Sustainable Risk Reduction

Retrofitting existing homes and mandating resilient construction for new builds means fewer destroyed properties, faster post-disaster recovery, more stable insurance markets, and lower disaster costs borne by all taxpayers. This is particularly vital for vulnerable households, who are disproportionately impacted by disasters and possess the least financial cushion to absorb unexpected losses.

The work being done at Arizona State University highlights the critical importance of collaboration between academia, the insurance industry, and government entities. By treating insurers, builders, and residents as a single interconnected system, researchers are paving the way for smarter, more sustainable disaster preparedness strategies. As environmental risks continue to escalate across the USA, shifting the focus from reactive rebuilding to proactive resilience is no longer optional—it is an economic and moral imperative.

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