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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 resulting from 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 that accumulated by 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 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.

Seismic Retrofit

Strengthening buildings for improved earthquake resistance

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Roof Condensation

Thorough inspection and repair of moisture damaged hardware

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Structural Repairs

Fixing structural problems without disrupting your business

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