Is Magnesium Siding the New Way to Protect Yourself When Insurance Doesn’t?

An average of 358,500 homes are lost to fire each year in the United States. With wildfires becoming more common, that number could increase. 

The rise in flooding and fires has caused many insurance companies to rethink their policies, with some increasing premiums and some just simply not renewing or offering new insurance plans.

While insurance companies in California are leaving due to increased fire risk, homeowners are taking risk mitigation into their own hands with magnesium. According to one report, fire-resistant homes are being built in Calaveras County, California, with magnesium siding from Canada. Builders say it’s not only fire-resistant but also resists mold, insects, and water. 

But is it enough to replace insurance?

Using Magnesium to Protect Your Property Against Fire?

Magnesium is a naturally occurring element that can be taken as a supplement—and these days, it can also be used as a building material. Magnesium paneling was launched around 2010 as an alternative to traditional fire-resistant wall materials. This durable cement paneling is made from magnesium oxide, which is created by combining layers of glass fiber mesh to reinforce the magnesium oxide cement.

While they aren’t completely fireproof, they are fire-resistant. They might be able to act as a buffer to fire damage, reducing the costs of fire, not to mention their durability against flooding.

“We know that if we’re building homes that are engineered right from the start to be fire-resistant, we have a better chance of surviving a horrible situation of a wildfire,” Bill Soest of Evergreen Performance told ABC10 News.

Using magnesium and other type of construction materials to protect against the elements is nothing new. Humans have been building against the elements since the start of human history. And when disaster hits, we learn from it, including how to prepare for the next one. It’s not just about making sure our homes stay intact—it’s a form of survival.

Take hurricanes, for example. One Florida community built to withstand hurricanes endured one of last year’s worst storms with barely any impact. And we’ve had the technology to design buildings that can withstand earthquakes for years. 

Homes that can withstand extreme weather aren’t just for the ultra-wealthy, either. Geodesic domes meant to withstand any weather event are about the same price as the average home in the U.S. and are popular among a wide variety of clientele.

But Can Magnesium and Other Materials Be Used in Place of Insurance?

As climate change becomes more severe, we’ll need to find ways to protect our homes (and investments) from more extreme weather events. While we’ve traditionally relied on insurance policies to get us through any disasters, many Americans are giving up on insurance altogether. But does that mean magnesium and other types of disaster-resistant materials will replace insurance policies?

The short answer is that it’s unlikely. Insurance policies can help reduce financial uncertainty and make losses from accidents and disasters more manageable. However, building more fire- and flood-resistant buildings can help mitigate overall risk. 

But it comes at a cost. Magnesium oxide boards tend to be priced higher than gypsum boards, for example. If homeowners can’t afford insurance, will they be able to afford the extra cost of fire- and water-resistant building materials? Still, investing in durable materials might be worth it in the long term—especially if insurance companies keep jumping ship.

Related: How to Protect Your Rental from Fires, Floods, Lawsuits, and Liability

The Bottom Line

A house made from magnesium won’t replace your property insurance, but it can be a good way to mitigate risk when insurance companies pull out or increase premiums. However, having a fire-resistant house comes at a price, and with housing prices already sky-high and mortgage rates jumping even higher, it might not make the most economic sense unless you live in an area prone to wildfires or flooding.

For real estate investors thinking about investing in areas prone to natural disasters like California and Florida, it might be worth finding out more about magnesium oxide panels.

Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.