Hurricane Risks and Economic Viability of Strengthened Construction

Abstract

This paper describes a procedure for evaluating the effect of changes to existing residential structural vulnerability on hurricane-induced building damage and expected insurance losses. Two scenario-based models are proposed for modeling changes in the vulnerability of the existing building stock due to improvements in building envelope performance, for both existing and new residential construction. The influence of changes in structural vulnerability over time on expected insurance losses can then be obtained. The cost of retrofit or additional cost to upgrade new construction can be included in the hurricane damage risk-cost-benefit analysis to assess the economic viability of this and other scenarios. “Zones of economic viability” are developed that illustrate in a graphical manner whether retrofitting of existing residential construction is cost-effective. For example, in some cases retrofit costs of up to 40% of initial building costs may be economically viable. The risk analysis also enables the time to economic viability to be calculated.