Underwriters aware of the risks of wood-frame construction: Survey

Concrete’s durability has prompted a marked difference in insurance costs

Underwriters aware of the risks of wood-frame construction: Survey

Construction & Engineering

By Lyle Adriano

A new survey conducted in the US, entitled “Survey of Insurance Costs for Multifamily Buildings Constructed with Wood frames and Concrete,” has found that most builder’s risk and commercial property insurers are savvy enough to recognize the greater risks wood-frame construction buildings are exposed to, versus concrete buildings.

The study, commissioned by the National Ready Mixed Concrete Association (NRMCA) and conducted by Boston College’s Dr. Pieter VanderWerf and Nicholas Haidari, obtained builder’s risk and commercial property insurance premium quotes for two hypothetical buildings – one with a wood frame, and the other made of concrete. The study drew quotes for locations such as Edgewater, NJ, Towson, MD, Orlando, FL, Dallas, TX, and Los Angeles, CA.

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Notably, the study found that builder’s risk insurance quotes for concrete buildings were about 22-72% less than quotes for wood frame buildings. Similarly, quotes for commercial property coverage on concrete buildings were 14-65% less than quotes for wooden frame structures.

“This study validates what has long been the assumption when it comes to the hidden costs of certain types of buildings,” commented Kevin Lawlor, a spokesperson for the NRMCA-led Build with Strength coalition. “At a time when multifamily residential building fires are a seemingly common occurrence, concrete’s durability in the face of such threats has resulted in a marked difference in terms of insurance costs.”

“Concrete buildings cost less to insure because they’re not going to combust, and they’re less prone to degradation over the lifespan of the structure,” Lawlor added. “It’s only logical insurance rates would reflect that durability.”

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