This Study of Insurance Costs for Mid-Rise Wood Frame and Concrete Residential Buildings examines the property insurance costs for wood frame and concrete mid-rise residential buildings, to identify the risk factors affecting differences in insurance rates between the two building systems. It was conducted by GLOBE Advisors in 2015 on behalf of the Concrete Council of Canada, with the data drawn from relevant published literature as well as consultations with brokers, underwriters and property managers.
The research shows that the costs for insurance, maintenance and calamity repairs over the life span of a building carry major cost implications for developers, strata managers, and condominium owners.
The consultations with brokers, underwriters and property managers confirm a substantial differential in the costs to insure wood frame buildings compared to comparable buildings constructed primarily of non-combustible materials, with the average rate for wood buildings being a factor of up to 7.5 times greater than that of concrete buildings.
The study identifies four main reasons for the higher rate for wood buildings: greater fire peril; significantly higher moisture risk; climate change and; difficulty in obtaining insurance for wood frame structures.
It calls for a definitive comparative assessment of total lifecycle costs of wood frame and concrete structures, taking into consideration not only changing technologies and related costs of building products, but also the longer-term costs of building operation, maintenance and decommissioning.
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