Seismic Retrofit Answers Revealed:
As a property owner or manger, I'm sure you
have many questions about seismic retrofit.
Is a seismic retrofit
cost-effective even if an earthquake NEVER occurs? Many building owners perform seismic retrofits without ever
anticipating an earthquake! To most, a retrofit translates into
substantial savings in the form of reduced earthquake insurance
premiums. An additional advantage of performing a retrofit is
that it often significantly increases the value of the property.
In fact, the "Commercial Property Owner's Guide to Earthquake
Safety" specifically states, "you may find that you will get a
better price for your property if you strengthen earthquake
weaknesses before you sell."
What additional benefits are there to
performing a seismic retrofit?
Today, property owners, REITS and
commercial real estate management companies are expected to
conduct their business with good stewardship. As government
agencies become more aggressive in enforcing safety and building
code requirements, performing a retrofit is seen as a rather
economically attractive alternative to litigation or cessation
of business operations.
The minimum retrofit increases the likelihood that the occupants
will be able to evacuate the building. Finally a seismic
retrofit will also increase the probability that the building is
habitable and usable following an earthquake.
How can I estimate the amount of my
reduction in earthquake insurance by performing the retrofit?
Saunders often includes a "before and after" retrofit insurance
quote upon request. By partnering with several insurance
providers Saunders can easily demonstrate the potential return
on investment by performing a seismic retrofit.
Would I save money if I performed the
seismic retrofit and roof repairs at the same time?
Buildings
need a new roof every 15-20 years. If a building owner performs
the seismic retrofit concurrently with the new roof system,
comparatively they can retrofit a building for less than the
cost of a conventional project.
The rationale for this savings exists in the type of hardware
used. When a building's roof is removed, straps are attached to
the roof members rather than installing heavy hardware on the
inside. In addition, labor costs are reduced because detail
access is more available.
Why is it NOT a good idea for my general
contractor to perform the retrofit?
While many general
construction companies claim to be experts in seismic retrofit,
their experience in this area is only a fraction of Saunders'. A
seismic retrofit requires specific experience in the selection
and installation of the appropriate material by properly trained
and skilled crew members. Selecting a "generalist" to perform
the retrofit may be more convenient but can be quite costly and
the results may fall short of your ultimate expectations.
In
addition, a firm specializing in seismic construction will save
their clients money by getting the work completed properly the
first time without costly changes being required upon
inspection.
This difference between a "construction generalist"
and a "construction specialist" might be comparable to that of a
family doctor and a cardiologist (heart specialist). If you were
the patient needing heart surgery, which one would you want
performing your procedure?
What is the likelihood of an earthquake?
The Commercial Property Owner's Guide to Earthquake Safety, page
9 (Link) states:
- "Expected damages in California in the next 10 years exceed $30
billion."
- "Three quarters of our nation's earthquake losses will be in
California."
- "Efforts to reduce the losses from earthquakes have already
proven effective."
What are some commonly misunderstood
requirements for property owners?
According to the Commercial Property Owner's Guide to Earthquake
Safety, page 2, California State Law does NOT require the seller to":
- "Hire someone to evaluate a commercial property."
- "Disclose specific earthquake weaknesses of a commercial
property."
- "Strengthen a building before selling it."
Can I obtain earthquake insurance without
a seismic retrofit?
There are several factors, which must be considered when
answering this question.
One is the earthquake insurance cost for the building's
geographical area. A new policy of insurance companies is to
only insure up to a predetermined value in a geographical area.
For example, the zip code 90712 may have a maximum insurable
value of $750 million. As a result every insurance policy in
that zip code combined must not exceed that value. This is
understandable when considering the fact that if a large
earthquake hits an area resulting in total devastation, the
state must possess the resources to support the insurance
company. If the total money lost by an insurance company is too
high, the insurance companies could go bankrupt.
Thus an insurance company will discover the total summed
insurance policies written in an area to decide if they will
insure a building.
Another important factor when considering insuring a building is
the Probable Maximum Loss (PML). After a seismic retrofit, the
PML value is typically less than 20%, which increases the
chances of insurability.
Do you have questions not addressed here or want a quote? Contact Saunders by clicking here.
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