| Disaster-proof your home cost-effectively |
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It pays to shop around. Some insurance discounts are
mandated by law, and others are company incentives.
Some projects pay for themselves quickly. Kevin Simmons,
an associate professor of economics at Austin College in Sherman,
Texas, studies the costs and benefits of disaster mitigation. He
also lives in a town where damaging hailstorms are frequent unwanted
visitors.
When he bought his house, the roof was hail-damaged.
Instead of reroofing with regular shingles, he shelled out about
$1,500 more for flexible hail-resistant shingles. He says his insurance
company reduced the premium by $500 a year. "That's a no-brainer,"
Simmons says -- the more-expensive shingles paid for themselves
in three years.
Judging cost-effectiveness
That's rare. Some expensive projects have no chance of paying for
themselves in the time that the homeowner intends to live in the
house. It's worthwhile to ask whether such upgrades increase the
value of the house, and if so, by how much.
Simmons tackled one such question a few years ago
on behalf of a town on a barrier island on Florida's Gulf coast.
(His clients asked him not to identify the town.) He and his associates
researched sales records to determine whether having built-in metal
storm shutters increased a home's value. Fewer than 30 percent of
homes in the town had shutters.
"We found that homes with storm shutters
sold at a premium of about 5 or 6 percent," Simmons says.
That was on the barrier island, though. A short distance
away, on the mainland, homes with shutters didn't sell for a significant
premium. Buyers perceive, Simmons says, houses on barrier islands
are more vulnerable than houses on the mainland.
The most cost-effective home improvements -- in terms
of raising a home's value -- are those that make the house look
better. Most disaster retrofitting projects, such as bolting a wood-frame
house to its foundation to resist earthquakes, or installing brackets
to hold storm shutters, are invisible, ugly or, at best, utilitarian
looking. Don't expect to recoup the cost of a disaster-mitigation
project when you sell the house.
Get objective, experienced advice
A real estate agent with years of experience selling houses in your
neighborhood can offer an opinion about the effects of disaster
retrofitting on resale price. Or hire a property appraiser to make
an estimate. Ask a seasoned professional who knows your neighborhood
well. Don't seek the contractor's opinion about the effect of his
work on your home's value. That's like asking a barber if you need
a haircut.
Even if a project doesn't pay for itself in lower
insurance bills and increased resale value, it might be worthwhile
if the upgrade makes you feel better. It feels satisfying to know
that your shutters and roof can handle a strong hurricane; that
the water heater is strapped to the wall studs so an earthquake
won't rip it from the pipes, flooding the house with water and natural
gas; that you have wildfire-resistant landscaping and soffits and
eaves.
On the other side of a disaster, there's no
feeling of misery like being displaced from your place of comfort.
It's depressing to have to move out of your home while it's getting
rebuilt, or to have to live in disarray while repairs are being
made. No one can set a price on that but you and your family.
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