By Spencer Macalaster
As we see more record high temperatures along with more intense and frequent storm activity, colder winters might seem inconsistent with an over-arching warming trend. But they’re not. More severe winters could be part and parcel of changing weather patterns, as well as evolving actuarial modeling and more restrictions from insurance companies on real estate coverage.
According to the most recent predictions from the Farmer’s Almanac, the Northeast might be in for an unusually cold winter for the 2019/2020 season.
Heading into winter weather is a good time to take stock of property holdings to make sure they’re adequately insured and protected from the havoc that severe cold can wreak. On the insurance side, we’ve seen a significant spike in water-related damage claims in both new developments and existing properties. As a result, carriers are putting more restrictions on what they will cover. A significantly colder winter could manifest into greater water-related claims.
Understanding the biggest threats extreme cold poses and taking measures to prepare against these during winter weather can go a long way in mitigating costs and exposure.
Frozen pipes. Cold gives rise to frozen pipe damage. When pipes burst, they can cause serious interior and exterior damage to a property. This is the most common type of real estate claim in winter. Make sure the heating systems of your properties are maintained and are in good working order before the mercury hits freezing. And see that pipes on exterior walls are adequately insulated.
Ice dams. While this is more of a concern on houses than commercial property, ice dams can be a devastating cause of loss. When snow collects on a roof, warmth from the house heats up the snow pack, melts, reaches the soffit and freezes, causing a dam. Snow melts, backs up and gets into the house. Clearing roofs regularly can prevent ice dams.
Slips and falls. From a liability perspective, slips and falls on icy surfaces pose a constant risk to owners during winter weather. Although there are laws that pertain to natural accumulation protections, it’s incumbent on the owner to maintain clear and safe passageways in and out of properties. Neglecting to clear and salt entrances and downspouts have led to settlements in favor of plaintiffs.
Put your property in as safe a condition as possible and attend to defects in common areas to avoid injuries. If you contract with a third-party for snow removal and maintenance of entrances and parking areas, make sure that you have contractual indemnification.
Roof collapse. Roofs can collapse under the weight of snow and ice. In addition to physical damage to a property, a roof collapse can cause injury to occupants or visitors. Again, check your coverage before heading into winter, and make sure any third-party you hire is also properly insured and that you have some sort of indemnity in your contract.
Property owners should be thinking about how to prepare for winter before the first flakes fall. Work with your broker ensure you have adequate coverage for winter’s wrath.
Macalaster is executive vice president and real estate practice leader at Risk Strategies, one of the United States’ largest insurance brokers, with over two-dozen specialty practices. He has over 30 years of experience in real estate risk management. Macalaster is a Boston board member of the Association for Corporate Growth — dedicated to serving professionals in the merger/acquisition industry, as well as a member of the Massachusetts chapter of the Risk and Insurance Management Society (RIMS).