A 16-unit apartment building was decimated and all 50 of its residents displaced after two fires broke out within 30 hours of each other at the Spring Hill Apartments complex in Goose Creek, South Carolina. While no one was injured in the early October blazes, which officials said appeared to be unrelated to one another, the American Red Cross was called in to set up a temporary shelter and assist the families who lost all of their possessions.
The two-story building first caught fire at approximately 10:15 a.m. on October 2. It was one of the largest fires Goose Creek had seen all year, according to Chief Robert Maibach of the Goose Creek Rural Fire Department, requiring 70 firefighters from several local departments to contain it. The next day at approximately 8:30 p.m., flames were spotted in two units across a breezeway from the initial fire—too far from the first outbreak to be a rekindling of it, Maibach said. The second fire gutted the remaining half of the already-evacuated apartment building.
Structural damage prevented authorities from pinpointing the causes of the back-to-back blazes, and the investigation was turned over to the property owners for further investigation through their insurance carrier.
“Residential building fires can be catastrophic, and they can certainly put an individual out of business,” said Gina Jones, Vice President, Director, Environmental Programs, Burns & Wilcox, Denver, Colorado.
An all-too-common threat
With any apartment complex fire, the financial toll can be significant. In the U.S., 109,700 multifamily residential building fires occurred between 2013 and 2015 and caused an estimated $1.4 billion in property loss.
Residential building fires increased by 2 percent between 2008 and 2017, the U.S. Fire Administration reported, and related deaths increased 8 percent during the same time frame. In 2017, the most recent year for which data are available, there were 371,500 residential building fires that resulted in 2,695 deaths, 10,825 injuries, and a total of more than $7 billion in property losses.
“Residential building fires can be catastrophic, and they can certainly put an individual out of business.” –Gina Jones, Burns & Wilcox
Apartment fires accounted for just over a third of U.S. home structure fires between 2013 and 2017, according to an October report from the National Fire Protection Association. Such fires were less likely than single-residence home fires to result in fatalities, due in part to code requirements and the use of smoke detection and sprinkler systems.
In Canada, 6 of every 10 structural fires between 2005 and 2014 were residential, according to the National Fire Incident Database. Of the 19,062 structural fires reported in Canada in 2014, 74 percent were residential. In winter months, items like portable space heaters are the leading cause of fires, the Canadian Red Cross noted.
“Having a second fire occur within a day or two is very unusual,” said Barry Whitton, Managing Director, Burns & Wilcox Brokerage, Atlanta, Georgia. Nevertheless, Whitton said, apartment complex fires happen on a daily basis. “They can be caused by tenants who smoke or use gas grills or candles—there are many things that could potentially lead to a fire.”
Recent news headlines underscore his point. On November 28, a fire ripped through an apartment complex in Beaver, Utah, displacing 13 residents and destroying all nine units. In another instance on December 1, the American Red Cross was called in to assist multiple families after an apartment complex fire damaged 16 units in Huntsville, Alabama.
The use of heat or open flame to thaw frozen pipes in winter months is another common fire hazard, Whitton pointed out. Fire risks are also elevated in aging apartment buildings and those that are not properly maintained.
Protecting against familiar and unfamiliar risks
The ever-present risk of structural fires—and their potential for catastrophic loss—mean property owners must be prepared for the worst-case scenario. Designed for commercial residential properties, Habitational Insurance policies cover losses stemming from apartment fires, including property damage, debris removal and the loss of rental income.
Fewer carriers are providing the Habitational Insurance coverage that property owners need, Whitton said, making the coverage more challenging to obtain, especially if you are not familiar with where to look for it. Increased risks posed by fires and severe weather events are responsible, he explained.
Habitational Insurance coverage is of crucial importance to property owners, especially when considering how quickly losses can add up, Whitton said. After a fire or severe weather event, for example, the cost of replacing one roof is multiplied by many units.
“A typical apartment complex has multiple buildings. If you have one weather event, you may need to replace 10 or 15 roofs, not just a single roof,” Whitton explained.
Property owners must also consider the lesser-known risks related to a structural fire, including potential environmental hazards, Jones explained. If a fire should release pollutants into the environment, Environmental Insurance can help cover bodily injury, property damage and cleanup costs.
“Oftentimes, when you have an apartment or habitation type of fire, you are releasing volatile organic compounds—VOCs—which are found in paint, varnish, cleaning and disinfecting supplies,” Jones explained. “When these things burn, they can emit toxic fumes.”
“A typical apartment complex has multiple buildings. If you have one weather event, you may need to replace 10 or 15 roofs, not just a single roof.” –Barry Whitton, Burns & Wilcox Brokerage
The extent of any health effect from toxic fume inhalation is dependent on the level and the length of the exposure, Jones said. Other environmental concerns related to apartments include the presence of asbestos, lead-based paint, mold or hot tubs or pools that could contain legionella.
“Those are the types of things that can come back to the property owner,” she said, and they can come at a shockingly high cost. “When you are talking about an environmental release, losses are truly catastrophic.”
Proper precautions vital to prevention, recovery
Discussing evacuation routes and fire prevention strategies with tenants and having proper fire procedures in place are key steps for any apartment complex owner or property management company, according to the Centers for Disease Control and Prevention and the U.S. Fire Administration. This includes encouraging tenants to invest in renters insurance to help cover the costs associated with personal property loss or damage, housing if they are displaced from their apartment and legal liability if they are found at fault for causing a fire or other event, said Whitton.
Whitton also recommends that property owners and managers educate tenants about the most common fire hazards and strictly enforce rules designed to prevent fires, such as bans on smoking or using grills on balconies. Accidents or equipment misuse and malfunctions related to grilling caused an average 8,700 fires in U.S. homes annually between 2013 and 2017.
A knowledgeable property manager should be on site to ensure these fire prevention guidelines are met, Jones said. Beyond fire prevention, she added, procedures should also be in place to address everything from handling water leaks to the safe disposal of cleaning products.
When evaluating any type of insurance coverage needs, consulting an expert is critical, Jones said. Property owners who fail to discuss their coverage needs with insurance brokers and agents familiar with the full range of potentially catastrophic exposures they face do so at their peril, she warned.
“Being underinsured can leave them responsible for financial losses following a fire or other event,” Jones said.
As with any coverage need, an insurance broker or agent must be consulted. Click here to forward this article to your insurance broker or agent to ask if you need this coverage.
This information was provided by Burns & Wilcox, North America’s leading insurance broker and underwriting manager. Burns & Wilcox works exclusively with retail insurance brokers and agents to assist clients like you with their specialty insurance needs. Ask your insurance broker or agent about Habitational or Environmental Insurance coverage that might be right for you.