The Impact of Wood Frame Fires on Insurance Costs
A recent article by The San Francisco Chronicle explains how large fires have destroyed almost 50 major housing projects across the country since 2009. In 2018, construction fires have caused more than $100 million in damage. The reason for the high level of financial damage is because developers are building denser projects due to high demands for city living. The trend is also attributable to the increased use of wood frames for mid-rise projects due to its cost-efficiency and renewable nature.
Fires are not only causing physical damage to unfinished homes and businesses, but they are also increasing the cost of insurance premiums. The effects of these increased costs have ripple effects all the way down to increased rent costs for tenants.
Since wood frame fires on builders risk are increasing, the security requirements are stricter. Some carriers are requiring Fedora and other carriers are requiring 24 hours watchmen on site. It is important to be aware of these changes and stay up-to-date on the insurance policies. Many people do not know that builders risk policies have warranties that retract coverage if certain security measures are not in place. Be sure to read your policy and ask your broker about the critical safety measures so that your company is fully covered in case of a fire, or any other disaster, on site!