Climate change has elevated the risk of natural disaster losses, sending real estate insurance premiums soaring.
Properties with climate-resilient features that protect from hurricanes, flooding, fires and wind have been able to to secure cheaper insurance premiums and reduce long-term costs by lowering their risk of property damage.
Those renovations reduced The Eddy’s estimated flood loss risk from $10 million to $1 million, which meant ten-times cheaper annual flood insurance premiums, plus savings on wind insurance, according to ULI. headtopics.com
Lindsay Brugger, vice president of urban resilience at ULI, said that, along with reducing insurance premiums, climate resilience can generate savings by lowering operating expenses, improving the marketability of a building and avoiding construction costs when a natural disaster hits.National Institute of Building Sciences
“Over time, these conditions could result in declining demand for office and retail space in our buildings or the inability of us to operate the buildings at all,” the company said in the filing. “Investing in the asset as opposed to depending on insurance coverage just makes more sense nowadays,” said Tony Liou, president of sustainable engineering firm Partner Energy.Consequently, climate-resilient architecture is no longer just a luxury expense — it’s a means of securing discounted insurance and lowering long-term costs. headtopics.com
She recently consulted on a trio of 1970s vintage multifamily buildings in Miami Gardens, Florida whose owner, in order to meet new lending requirements, needed to increase the property’s wind insurance policy by 850 percent — from $5 million of coverage to over $47 million. After an initial risk assessment, insurance firms only felt comfortable covering an additional $5 million.