The basics:

• Proposed Firewall Act would offer up to $25K in refundable tax credits
• Applies to homes in disaster-declared areas within the past 10 years
• New Jersey would benefit due to recent flood and storm events

The tragic flooding in the Texas hill country underscores how major weather disasters are now a regular occurrence. For homeowners, taking proactive steps to make their homes more resilient to natural disasters can mean the difference between getting a homeowner back into the property after a devastating event or facing the prospect of rebuilding.  

A proposed bipartisan bill called the FIREWALL Act (Facilitating Increased Resilience, Environmental Weatherization And Lowered Liability) would provide Americans with tax credits for protecting their homes from natural disasters by upgrading fire resistance, floodwater management and other mitigation measures. Homeowners must make improvements to a primary residence in communities that have experienced a federally declared disaster within the last 10 years.

New Jersey would benefit from the act following federally declared disasters that took place less than 10 years ago, including Hurricane Ida in 2021 and severe storms and flooding in 2023. 

As owner of a property and casualty insurance agency in a suburb of Philadelphia, I insure clients in several states. That territory includes people living in coastal areas of New Jersey, Delaware and Maryland. Many of these clients understand the need for upgrades, but they can’t afford them. The average price of installing a whole-house generator to keep a sump pump running during a storm is about $5,000. Additionally, a new impact-resistant roof can cost twice as much as standard shingles.  

Higher risk

For many years, homeowners turned to their insurance companies to help pay for minor problems, such as a burst pipe causing damage or hail damaging a roof. However, we frequently are seeing claims for catastrophic loss of a home due to wildfires, flooding or wind damage. The National Oceanic and Atmospheric Administration’s (NOAA) National Weather Service recently predicted an above-normal hurricane season in the Atlantic this year. Meanwhile, 16,000 buildings, including homes, were destroyed in the Southern California wildfires in January.  

As the cost of disasters is rising, many property insurers are pulling out of high-risk markets like Florida. According to AON, global natural disaster events caused $374 billion in economic losses in 2024, driven by hurricanes and SCS in the U.S.

This was 14% above the 21st century average and the ninth-consecutive year of losses exceeding $300 billion.  

There’s proof that government spending and tax credits for disaster mitigation can save us all money. According to an analysis by the National Institute of Building Sciences, every federal dollar spent on mitigation against fires, flooding and other natural disasters saves the taxpayer six dollars in the long run. 

What’s covered

I serve as a national trustee of the National Association of Insurance and Financial Advisors. NAIFA commends the FIREWALL bill’s thoroughness in outlining how the tax credit can support homeowners in protecting themselves from future disasters.  

According to its sponsors, the proposed tax credit will cover 50% of the eligible upgrades, up to $25,000, for families earning less than $200,000 per year. The credit phases out for families earning above $300,000.

Eligible upgrades include:

• Fire-resistant building materials and roofing
• Stormwater barriers
• Air filtration, and the removal of vegetation posing a risk to a home

The credit will be adjusted for inflation starting in 2026 and is fully refundable. 

Other upgrades that the act would cover include funds for:

• Installing exterior doors that are more wind-resistant
• Sealing basement walls for waterproofing
• Automatic shut-off valves for water and gas lines
• Flood vents that minimize the destructive force of floodwaters

We know more severe weather is here to stay. The FIREWALL Act will help homeowners take the necessary steps to prepare themselves for the worst.

Carina Hatfield, LUTCF, CLCS, LACP, is a NAIFA national trustee and the owner of Weigner Insurance & Financial Services in Pottstown, Pa.