Did you know that disaster safety experts estimate that for every dollar a homeowner invests in mitigation, the return can yield up to seven times the amount in measurable savings? So to use lightning protection as an example, a $3,000 lightning protection system can save a homeowner over $20,000 in damages connected with a single lightning strike or surge event. And if the lightning strike results in a structural fire, the damage costs are likely to escalate well beyond that $20,000 figure.
While homeowners can’t be sure when or where a disaster will strike, they can certainly take measures to plan ahead and increase home safety. Benjamin Franklin, the inventor of lightning protection, may have said it best with his famous quote, “An ounce of prevention is worth a pound of cure.”
Now it looks like an incentive may be on the horizon for homeowners who are willing to take that ounce of prevention.
The “Disaster Savings Accounts Act of 2013” is a proposed federal legislation introduced in October by U.S. Representative Dennis Ross that would help Americans pay for disaster mitigation and preparedness tax-free. The Disaster Savings Accounts Act of 2013 would allow homeowners to deduct up to $5,000 per year through tax-preferred “disaster savings accounts” to use for expenses related to the mitigation of natural disaster risks, including earthquakes, floods, hail, hurricanes, power outages, tornadoes, wildfires and yes, lightning!
In the words of Congressman Ross, “This legislation will give families more tools to invest in their safety and resiliency, and will help contribute to a potential reduction in the economic costs of natural disasters.”
Here is an Official Summary (as listed on a website connected with Congressman Ross) of the Legislation:
Disaster Savings Accounts Act of 2013 – Amends the Internal Revenue Code to:
(1) establish tax-exempt disaster savings accounts to pay the expenses of homeowners for equipment and materials for mitigating the effects of a natural disaster,
(2) allow a deduction from gross income (above-the-line deduction) up to $5,000 (adjusted annually for inflation) in a taxable year for cash contributions to such accounts, and
(3) set forth tax rules for account distributions and failure to report on disaster savings accounts.
The proposed legislation is receiving support from mitigation experts such as: Federal Alliance for Safe Homes-FLASH, Florida Insurance Council, The Home Depot, Kohler, RenaissanceRe and Simpson Strong-Tie. LPI joins these experts in support of the legislation and is urging industry members and partners to support the Disaster Savings Accounts Act of 2013.
It’s a certainty that Mother Nature will strike again and again. The question is: will we be better prepared for the next weather event? If homeowners remember Benjamin Franklin’s ounce of prevention advice, they can be better prepared.
As we count our blessings this Thanksgiving, let’s enjoy a little savings and a lot of peace of mind by supporting the Disaster Savings Accounts Act of 2013!