In order to calculate the true cost of a commercial earthquake retrofit, property owners must consider the money that a retrofit will save over the course of time. Buildings in California that are over twenty-five years old should be inspected for an earthquake retrofit. When considering strengthening a property to withstand a powerful earthquake, most property owners shop around, looking for the cheapest options. It is easy to believe that the price for reinforcing a commercial building to withstand devastation from powerful seismic activity is a complete and true cost. In reality, it is not. When considering the potential damage from even the mildest earthquakes, any steps taken to prevent the expenses related to an earthquake should be considered and calculated as savings. If you are contemplating the cost of an earthquake retrofit, make sure you look at the benefits as part of your decision-making process. Ask yourself, “How much will I save if I get an earthquake retrofit?”
There are several different ways that commercial property owners save money with a earthquake retrofit:
Property owners will have a stronger building in the California real estate market.
The marketability of any commercial property is improved when it’s been through a maintenance process to improve the codes and standards. Those looking to purchase a commercial property are attracted to the safety and overall security that an earthquake retrofit provides to the building occupants. When a building is strengthened to withstand the severe impact of a devastating earthquake, the Probable Maximum Loss (PML) decreases. The number of potential lenders is often higher when the PML is low. When the number of lenders increases, it usually means more buyers are readily available and looking to make a purchase.
Property owners have better financing options.
Most lenders who want a PML of less than 20% are satisfied when a thorough earthquake retrofit has been completed by an experienced and reputable service provider, such as Saunders Commercial Seismic Retrofit. Banks and lending institutions have very stringent policies about the level of risk and loss they will take.
The risk of injury and legal litigation is reduced with better earthquake safety.
Building owners most certainly have a responsibility to ensure the safety of all tenants and customers. If injuries occur during or after an earthquake, property owners can potentially lose an extraordinary amount of money if it can be proven they were aware that their building needed structural work, but had no plan in place to correct the issues. Even with adequate insurance coverage, it is likely the coverage would not be enough to cover successful litigation against negligence. A complete earthquake retrofit will provide asset protection, as well as peace of mind, because it helps decrease the number of issues that could cause damage and injury.
The cost of earthquake insurance coverage can be reduced.
It is difficult for many building owners in California to get earthquake insurance because it is simply too expensive. A reinforced building, however, is usually more insurable than one that is not and often the coverage needed will be less. A lower cap can reduce premiums. Insurance rates have increased 3 to 6 times the rate charged since 2005, so reinforcing your building with an earthquake retrofit may well be the only solution available for you to consider in order to get the insurance coverage you need.
Removing hazards and having your building completely anchored and reinforced should be primary objectives of any earthquake readiness plan developed for commercial properties. Saunders Commercial Seismic Retrofit can provide Bay Area building owners with an insurance quote based on current and after-retrofitting values so they can see how the changes can help lower earthquake insurance premiums. Most property owners find that it is more cost effective to retrofit a building prior to an earthquake rather than repairing expensive damages or paying for subsequent liabilities after the earthquake occurs. If you have questions or would like additional information to help determine if your commercial building needs to be retrofitted, call Saunders Seismic Retrofit today!