Protecting your Property

Home Or Property Damage Insurance Claim Lawyer Near Florida

Natural hazards need not become disasters. While strong winds, rains, floods, earthquakes, volcanic eruptions, tsunamis, storm surge, and hurricanes cannot be avoided, there are measures that can be taken to reduce the impact so that they do not become personal disasters. It’s called hazard mitigation and is applicable to commercial as well as residential property owners.

What is a disaster?

A disaster can, perhaps, best be illustrated with the following equation:

Disaster = Hazard + Level of Risk

The hazard will happen but if the building is located in an area of high risk then a personal disaster could occur. For example, if a house is located on a beach known for periodic high and battering waves, then it is likely the house will become demolished at some point in time. If the house is sufficiently set back from the reach of the waves then the level of risk reduces significantly. If the house is not built close to, or on the beach at all, then this risk is non-existent. The high battering waves will occur; but they will not reach the property.

Hazard mitigation

Hazard mitigation is the implementation of structural and non structural measures to reduce the adverse impact of natural hazards. “Structural” measures refers to the strength of the construction. “Non-structural” measures are “softer measures” and include policies and regulations. Using the example in the previous paragraph, it refers to setting back the house sufficiently, or much further away from the reach of the battering waves.

Example of hazard mitigation benefits

The World Bank in its publication Natural Hazard Risk Management in the Caribbean: Revisiting the Challenge provides the following case study of how hazard mitigation could have helped St. Kitts and Nevis.

A new cruise ship port was being constructed. Consultant reports highlight that the area was prone to high waves every 50 years, on average. The issue facing developers was whether they should spend as much as $3 million to $5 million more or take a chance on a rare disaster? They took the chance.

Port Zante was constructed for $22.5 million. In September 1998 Hurricane Georges inflicted particularly severe damage on St. Kitts and Nevis. Besides damage to a large number of houses in low income communities and an important hospital, Port Zante was damaged. The cost of damage was US$10.1 million and the insurance payout for material damage and business interruption amounted to US$8.1 million. Reconstruction was started shortly afterwards but was further interrupted by Hurricane Lenny. Damage from that event amounted to US$14 million, with the insurance paying out US$11.7 million.

Total cost of the construction and reconstruction was estimated at US$32.9 million or $10.4 million more. In addition, there was loss of revenue to the national economy over a four year period and additional finance charges incurred by the Government for reconstruction.

Had hazard mitigation practices been implemented, the original structure would have been built to withstand the rare 50 year return event and that would have increased the original construction price by 10 to 15 per cent or around $3 million.

Lessons to apply to local construction

Whether it is a home, commercial complex, or hotel, property owners need to know the following:

  1. What hazards are likely to impact my property?
  2. How often are these hazards likely to impact?
  3. Should I invest more money up front or take a risk from a rare or periodic event?
  4. If the area in which the property is being constructed is susceptible to hazards, what structural or non-structural measures should be taken?
  5. One non-structural measure is insurance, but even with a pay out, can I afford the dislocation and inconvenience of starting life or business all over again? If the answer is “no” – insist on hazard mitigation measures.