As long as building codes lag behind climate realities, private insurance markets will continue to dictate local safety standards by default. Resiliency Codes offer a clear, actionable strategy to change this dynamic.
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As long as building codes lag behind climate realities, private insurance markets will continue to dictate local safety standards by default. Resiliency Codes offer a clear, actionable strategy to change this dynamic.
By Alexis M. Pelosi, Former Senior Advisor for Climate at HUD, Principal at AP Strategies, LLC
A home in the U.S. can be fully code-compliant and still uninsurable. Every year, the gap between those two realities costs the U.S. housing market the equivalent of one month’s worth of new home construction to natural disasters.
As climate-driven hazards accelerate, a dangerous structural misalignment has emerged: What building codes deem legally permissible to construct is increasingly at odds with what catastrophic risk models deem financially viable to insure. In this regulatory gap, it is increasingly insurers—not engineers or building experts—who are setting the standards for what is considered “safe enough,” as building code updates lag behind.
This gap between code and risk, however, also presents the opportunity for a permanent fix. By establishing a clear, science-backed standard—a “Resiliency Code” that overlays existing building codes in high-hazard areas—states can move quickly enough to address outdated minimums and accelerating climate risks. Resiliency Codes offer a shared, predictable framework that replaces informal market signals with rigorous, forward-looking safety standards. In doing so, policymakers can better ensure that how we build and how we price risk are no longer competing forces, but are finally part of the same conversation.
Traditional building codes were designed to meet minimum life-safety standards, drawing heavily on historical data and lessons from past disasters. Updated through periodic, multi-year cycles, they are largely reactive and consistently outpaced by the accelerating frequency and severity of climate-related events. As a result, many newly constructed, fully code-compliant homes remain highly vulnerable to extreme weather.
Insurers know this, pricing and managing their exposure by making home coverage contingent on strict, site-specific mitigation measures—like defensible space clearance or roof upgrades. While framed as underwriting and pricing decisions, these requirements function in reality as de facto building code requirements. Insurers are essentially setting the thresholds for what is “safe enough” to insure. Importantly, these standards are being established outside the traditional public code-adoption process and without the benefit of comprehensive urban planning.
Facing a wave of insurer withdrawals and surging premiums, states are moving beyond rate regulation—and starting to legislate the physical resilience of homes themselves. Driven by surging costs and declining availability—with average premiums rising 24% since 2021 and roughly 1.9 million policies dropped nationwide—states are advancing a new wave of market reforms. Unlike past efforts that focused solely on rate-setting rules, today’s legislation focuses on the physical assets themselves. Through financial incentives for home hardening, mandated insurance discounts when resilience standards are met, and new transparency requirements for site-specific mitigation, these measures are essentially building code requirements in disguise.
Cementing this shift, the National Council of Insurance Legislators (NCOIL) released model legislation in 2024 that offers states a template for tying financial incentives (like grants and insurance rate reductions) directly to “beyond code” resilience standards. By relying on these financial levers, legislatures are effectively bypassing stalled building codes cycles and forcing the built environment to finally catch up with the climate risks that insurers are actively accounting for.
This transition toward insurance-led regulation is a pragmatic response to a crisis, but it raises concerns for public safety. Insurers rely on proprietary risk models that aren’t transparent. Allowing those models to shape real-world standards—as a 2025 legislative report examining California's resilience to natural disasters warns—creates a range of informal rules with no public accountability or democratic oversight.
To close this gap, states need to set their own rules around climate risk and building safety. Colorado’s recently enacted Wildfire Resiliency Code Board provides a blueprint. It establishes a centralized body of experts to define wildfire hazard zones and create enforceable, science-based building standards. This ensures the rules governing the built environment are written by public safety officials rather than the black-box algorithms of a reinsurance firm.
New Jersey provides another compelling model through its Resilient Environments and Landscapes (REAL) initiative. New Jersey adopted a forward-looking flood elevation standard called Climate-Adjusted Flood Elevation (CAFE), which uses projected sea-level rise through 2100 rather than backward-looking flood history to delineate risk zones.
These efforts demonstrate that states can establish transparent, forward-looking public safety standards aligned with the predictive science actuaries already use.
Efforts across the country have provided a clear formula for success: It’s time to move from reactive building codes to proactive resiliency codes. Here are four tools that states can use to make resiliency codes work.
As long as building codes lag behind climate realities, private insurance markets will continue to dictate local safety standards by default. Resiliency Codes offer a clear, actionable strategy to change this dynamic. By coupling transparent, science-backed construction requirements with targeted financial relief and fast-tracked permitting, states can reassert their authority over the built environment. It’s time to adopt a unified public framework that permanently aligns how we build with how we price risk.
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Maryland is pioneering a cross-state conservation finance model to fund pollution reduction outside its borders while still meeting environmental obligations.
Treating wood as a public utility, rather than a waste product, could reduce fire risk, support insurer re-entry, and unlock economic value that currently goes up in smoke.
Treating wood as a public utility, rather than a waste product, could reduce fire risk, support insurer re-entry, and unlock economic value that currently goes up in smoke.
RSG 3-D's non-combustible panel system offers a financially competitive alternative to conventional construction that delivers wildfire, earthquake, and hurricane resilience.
