Could Engineering Houses Affect Insurance? 15

[Lion06]

I am making some assumptions here, so please let me know if I am off-base with them.
It is my understanding that most residential homes are not engineered, but are simply built using the prescriptive requirements of IBC/IRC.
It is also my understanding that in hurricane-prone regions an exceptionally high percentage of damage to structures is to residential structures.
If this is true, I can only imagine it is becuase these structures aren't engineered. These areas (hurricane-prone) seem to have some of the highest homeowner's insurance rates in the country.
Would requiring homes to be engineered cause a reduction in premiums due to the fact that the homes would be less likely to sustain heavy damage during such an event?
Just a thought, any opinions?

 

[csd72]

I would imagine so, I think this is a good thing for the local structural engineers association to lobby.

 

[PatBethea]

Slippery slope, guys. Slippery slope. If the insurance lobby got that kind of legislation passed (and they would push it, even if they never lowered rates afterward), they'd use that as a foot in the door to lobby for all houses to be engineered. Constructing a house is too much trouble/expense as it is - involving an engineer and the associated "officials" to oversee them would just add to the headache. I'd rather see construction laws/rules come off the books and codes loosened rather than add to them.

 

[Lion06]

Pat-
Would you have a house be built to no standards whatsoever?

 

[PatBethea]

In some cases, why not?

My great-great-great gandfather built a house here in Florida on land he homesteaded. The house is still in the family. In the past five years, it has survived 3 hurricanes with only superficial damage. It wasn't built to any code.

My major gripe is the one-size-fits-all approach that code writers take. They find some extreme case and then set the code to cover that case when it is a non-issue for the majority of the people. There are probably hundreds of thousands of houses in this country that weren't built to any code - and they still function just fine. The house I live in was built in 1947 - it wasn't built to any code. This building where my office is located was built in 1927 - again not built to code. Codes can be a good thing, but don't forget that civilation got by just fine for thousands of years without them.

 

[csd72]

Typical engineering fees for a house are in the 2 to 6k range, I would consider that a small price to pay for life safety.

 

[Lion06]

Pat-
I am sure there are plenty of great homes out there that were not built to any code and are built well. That being said, your grandfather built that house for himself. Do you think the same quality of workmanship would have been put into it if someone else built it for him? Probably not. Most people don't build their own homes.
If you don't have some sort of code/standard you could buy a house that will leave the waterbed you just decided to put in crashing down on your brand new plasma screen t.v.
As csd points out, the typical cost for engineering a home is relatively small compared to the price of the house.
I know if I were to ever have a house built, I would certainly engineer it.
I'm just saying that if builders aren't held to some standard then you never know what you will be getting in a house.

 

[PatBethea]

That's just it - there is no "life safety" involved - especially with a hurricane which gives more than ample notice of its approach. There could be a loss of property - but that's no reason to require that an engineer be consulted. If some want to - great, but it shouldn't be codified so that everyone has to do it.

Used to be when you owned a piece of property, you could do what you wanted with it. It was called "property owner's rights" or more simply, "freedom". Now, as we inch closer to a full time nanny state, we have people who want to dictate that we spend more of our hard earned money and then tell us it's for our own good - for our "safety". Between codes and laws, in some areas, about the only thing a property owner can do without having to apply for a permit is pay his taxes.

 

[nutte]

Home builders are held to a standard. You're suggesting increasing that standard to which the houses must be built. Sure, it's safer for the occupants, but is the added cost worth it?

I saw a program a few years ago about safety devices for circular saws that would sense when they were cutting through "soft tissue," like a finger, and immediately stop the blade. They had a demonstration where the saw was running, and someone tried to put a carrot on the blade. The blade stopped and did not cut the carrot. This feature would only have added $5 or $10 to the cost of the saw. However, neither the consumers or the manufacturers wanted it. Millions of people use circular saws each year, but how many of them lose a finger? The risk was worth it.

Similarly, the risk of a house being damaged in a hurricane or tornado is low enough to many that they would rather not have a house engineered. Why repair a system that isn't broken?

 

[PatBethea]

StructuralEIT,

When I build a new home, I'll engineer it, too. But I won't do it because I "have to" or because I'm afraid for my safety. I'll do it because I'm an engineering geek and it'll be kinda fun.

 

[Lion06]

I was only talking about engineering homes in hurricane prone regions. Additionally, the point I was getting at was that in addition to not having to rebuild a house, the savings in home insurance could very offset the increased cost of engineering the home in a few short years.
That, to me, seems economically smart.
Maybe instead of requiring all homes to be engineered, the insurance companies could give a rebate (similar to my 20% discount for having an alarm system) if your home has been engineered. That would encourage people to do it, but not require it.

 

[Lion06]

Oh, the comment I made about no standards was in response to Pat's comment that he would like to see the code for homebuilding "loosened". It is already pretty loose, IMO, with only prescriptive requirements.

 

[csd72]

r.e:

"That's just it - there is no "life safety" involved - especially with a hurricane which gives more than ample notice of its approach."

"Why repair a system that isn't broken?"

Two words that bely these statements - New Orleans.

Pat,

What would you think if family cars were exempt from engineering standards.


nutte,

r.e."You're suggesting increasing that standard to which the houses must be built."
No one is suggesting increasing the standard, only the level of compliance with the code.

 

[jike]

I have no desire to have engineers design houses but would much rather get the prescriptive codes updated to be more in line with current engineering practices and standards. This would go a long way in solving these problems.

Home builders and construction suppliers lobby against these changes but I am sure insurance companies would be for it.

 

[JKW05]

Pat, If codes and/or standards were relaxed or made "optional" for one's "personal property" would you agree that the insurance companies should not have to pay for such structures that fail, or that the federal gov't should not have to pay $billions for a bail-out?

 

[nutte]

csd72: Hurricane Katrina was a once in a generation or so storm that also destroyed a lot of commercial (that is, engineered) buildings. Much of the damage was caused by the failure of the levees. I don't think the comparison is fair.

Even if it is, are you suggesting that we build all houses in hurricane prone regions to resist a storm of this magnitude? I doubt that $2000-$6000 estimate would apply in this case. At some point, it becomes prohibitively expensive to design against certain failures.

 

[PatBethea]

You're mostly there, JKW05. If an insurance comapany agrees to insure your structure, they should have to pay - assuming you've paid your premiums, etc. But, an insurance company doesn't have to grant an insurance policy (or they shouldn't have to).

And under no circumstances (unless they are at fault - i.e., they dropped a bomb on your house or something) should the government pay to "bail out" home (and business) owners when a structure fails. At some point an individual has to take some personal responsibility and become accountable. If you choose to build/live in a hurricane prone area, Uncle Sam shouldn't have to pony the bill if a storm takes your house out. If you want the "reward" of living on the coast, you should assume the risk as well.

 

[DWHA]

I do not believe that it should be required. A personal home, with a low importance value (per code) should not be required to be designed to stand up to an event such as Hurricane Katrina. If you look at the statistical probablity of the extreme events and the importance value of a house it appears that designing for that event is not pratical. So, I do not think that it should be required. However, if an insurance company wants to reduce the premium for a house that has been engineered, I am all for that. But it should not be required.
I have a question, when a house that it engineered goes down in a natural event. Who's butt is on the line. Is it the engineers? The contractors (who you could not prove did something wrong because the house is destroyed)? Or does the insurance just pay out the value of the house, with out going after someone (not likley).

 

[Lion06]

Pat-
What you are suggesting would put the insurance companies in a position to be able to charge everyone higher rates. If a builder were not required to build to any kind of standard, how in the world could the insurance company have ANY confidence in insuring any house? They would insure the houses and as they fail, one by one, the insurance rates will go up for all houses because they can't be sure who's home is engineered, or built to prescriptive requirements, or just thrown together. I guess the engineered home could provide bills from teh engineerto show it was engineered, but the guys in the middle (homes built by prescriptive requirements) would be charged the same as the guys who had their house just "put together".
That seems utterly crazy to me.
Not to mention a bit of personal responsibility for people who are not in your family that visit the home or your neighbor who doesn't want their engineered house damaged when your house that was just slapped together has the roof ripped off.

 

[JKW05]

Pat, Your reasoning seems consistent, and I agree with you for the most part. Unfortunately the politicians seem to enjoy pandering by giving our money away to those individuals who don't want to take personal responsibility. My brother lives in CA and has told me that a lot of people won't by EQ insurance because it's too expensive. But sure enough following an EQ, they are crying for FEMA to give them money.