RISMEDIA, March 23, 2007-A fire starts in a multifamily property every six minutes in the United States according to a just released 2005 National Fire Protection Association (NFPA) fire survey. The data indicated that in 2005, 94,000 fires occurred in apartments equating to nearly $1 billion ($948 million) in damages and loss.
The research also revealed a 7.1% increase in property loss associated with multifamily fires compared to the same data collected just a year prior. Although the total number of apartment fires did not increase from 2004, the property loss resulting from these fires did. On average, fire damage caused $10,085 per instance in 2005. This type of financial impact on a property's operating budget can be significant.
"The risk of fires at multifamily properties is very real as the NFPA data indicates," said Dirk Wakeham, president and CEO of LeasingDesk. "Owners can better protect themselves from the financial responsibilities of such fires by implementing a comprehensive renter's insurance program. Not only does it protect the owner from the financial impact of a fire, but it also gives residents a way to recoup the loss of belongings damaged or destroyed in the event of a fire."
In 2003, the Spanish Gate Community, a property located in Glendale, Colorado, experienced a widespread fire started by a negligent resident. The entire property was destroyed, displacing all 55 residents. At the time the property management firm, Baron Properties did not require renter's insurance as a condition of residency.
"Unless they had savings, our residents started over with nothing," said Drake Powell, senior vice president of Baron Properties. "There was only one person with renter's insurance at the property. That resident had an adjuster inspect the damage and a check was cut the next week."
Because of the severity of the Spanish Gateway fire, Baron Properties researched the value of requiring renter's insurance as a condition of residency. The management firm found that a comprehensive renter's insurance program would transfer the risk associated with resident-caused fires from the owner back to the resident and help minimize the financial burden on the property. As a result, all the communities managed by Baron Properties now utilize a renter's insurance program to reduce exposure to risk.
Other interesting findings of the NFPA fire data related to the multifamily industry include:
• 460 civilian fire deaths occurred in apartments
• 12.5% of all civilian fire deaths occurred in apartments
• Approximately 1.2 civilian fire deaths occurred in an apartment each day
• 3,000 civilian fire injuries occurred in apartments
• 21.7% of all residential fire injuries occurred in apartments
• 10.3% of all property damage occurred in apartment fires
• 13.8% of all residential property damage occurred in apartment fires
For more information regarding the survey, visit http://www.nfpa.org/assets/files/PDF/OS.fireloss.pdf
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