Posts Tagged ‘hurricane matthew’

New Approach Calculates Benefits Of Building Hazard-Resistant Structures

Hazard-induced maintenance costs can be significant over the lifetime of a building.

Researchers at the MIT Concrete Sustainability Hub (CSHub) are developing new methods to calculate the benefits of investing in more hazard-resistant structures. Jeremy Gregory, executive director of the CSHub recently presented one metric, the CSHub’s Break-Even Hazard Mitigation Percentage (BEMP), to officials in Florida and Georgia — states that can see millions in property damage due to hurricanes.

“The BEMP evaluates the cost-effectiveness of mitigation features for a building in a particular location by factoring in the expected damage a conventional building designed to code would endure over its lifetime, and comparing it to a more resilient, enhanced building design,” says Gregory. “In areas prone to natural disasters, more spending on mitigation is justified — the BEMP helps to identify how much extra spending is recommended.”

The southeastern United States was hit hard by weather patterns resulting from Hurricane Matthew in October. Georgia has sustained some $90 million in insured losses to date, and total claims are expected to rise. Florida was spared Matthew’s worst effects, but the state is regularly witness to the destructive power of such storms and there’s a lot at stake: The insured value of residential and commercial properties in Florida’s coastal counties now exceeds $13 trillion.

Gregory spoke to officials and members of the building community in Atlanta, Georgia, and Tallahassee, Florida, this month during roundtable discussions about building resilience, the BEMP, and hazard mitigation. He also presented the topic to journalists and industry professionals during a recent webinar.

“Structures in coastal areas states like Florida and Georgia are prone to damage from high winds and hurricanes,” says Gregory. “Through previous case studies we’ve demonstrated that investing in more hazard-resistant residential construction in some locations can be very cost-effective, especially in costal states where the impact of hurricanes can have devastating economic effects.”

One case study showed a BEMP of 3.4 percent for in the coastal city Galveston, Texas, meaning for a $10 million midrise apartment building, $340,000 could be spent on mitigation, and costs would break even over the building life. The highest BEMP calculations are in cities in southeastern Florida, where the values are approximately 8 percent.

Too often, building developers make decisions about materials or building techniques to keep initial costs down. Although the resulting structures are built to code, those codes often fail to factor in the long-term costs or impacts on future owners and communities. One of the goals of this research is widespread adoption of codes and standards that incorporate hazard mitigation into building design.

“Hazard mitigation efforts offer benefits to society at large,” says Gregory. “Builders or short-term owners might have to invest more up front, but — by decreasing recovery costs and lessening the impact on lives — insurance agencies, taxpayers, and future occupants benefit in the long run. Because of these long-term benefits, this is a concept that it makes sense for state officials to get behind.”


Source: MIT News

Will Your Insurance Cover Hurricane Matthew’s Damage?

Hurricane Matthew has come and gone but many Southeastern cities are picking up the pieces. The Atlantic Coast is reporting major flooding and the death count is up to 19.

Commercial real estate owners are surveying the damage. caught up with Clark Schweers, Forensic Insurance and Recovery practice leader at BDO USA, to glean some insights in the aftermath of the deadly storm. He shares his perspective on Hurricane Matthew’s business disruption and implications in the real estate industry in this exclusive interview.

“From an insurance perspective, there doesn’t need to be physical damage to trigger a claim,” Schweers tells “Commercial owners might have, or could consider adding, other types of coverage into their policies. It’s important to consider ancillary provisions when determining what the financial impact is to your business, and to protect against potential losses in the event of a natural disaster.”

Specifically, Schweers points to ingress and provisions within a property insurance policy is particularly valuable for businesses located on islands in the path of a storm. If a natural disaster or weather event results in a partial or complete inability for guests or customers to reach a particular asset, he says, this coverage allows a business to make an insurance claim.

“For example, a hotel on a barrier island might sustain no physical damage, but a bridge connecting the island to the mainland may need to be closed for inspection or damage,” he says. “That would restrict guests’ access to the location.”

Then there’s loss of attraction coverage. This allows a commercial business to make a claim if damage or closure to facilities or attractions that drive business to the asset or insured location occurs.

“From a real estate perspective, construction demand has been skewed toward coastal properties in recent years, and there have been relatively few natural disasters of similar magnitude to Hurricane Matthew in the last decade,” Schweers says. “As a result, the real estate industry has responded very well to consumer demand to develop condos, apartments, hotels, shopping malls and other assets around coastal population centers.”

As Schweers sees it, there’s rightful concern in the commercial real estate industry right now. The assessments on damage are not yet in, but it doesn’t look good.

“In the case of Hurricane Matthew, this is an unprecedented and unique storm whose path was uncertain,” Schweers says. “The potential damage area extended along hundreds of miles and several states, which could expose landlords and REITs with assets in these areas to potential financial repercussions.”


Source:  GlobeSt.