Surfside Condo Collapse Could Permanently Reshape Risk Assessment in Coastal Areas
Insurers could play an important role in lessening structural risks.
The unprecedented collapse of the Champlain Tower South condo building in Surfside, Fla., has the potential to completely and permanently reconfigure the way experts model risk and conduct risk assessment in coastal areas, according to a new analysis from S&P Global Intelligence.
The overnight collapse of the building last month claimed nearly 100 lives and sparked an immediate review of buildings over 40 years old in the Miami area for major structural flaws. And that scrutiny could “add another layer to how modelers and underwriters determine risk,” according to S&P Global.
“A pragmatic positioning is that we will find more buildings that are perhaps not close to imminent collapse but have had needs overlooked,” CoreLogic Inc. engineer and risk modeler Tom Larsen told S&P Global in an interview.
Typically, catastrophe risk modelers in Florida rate the vulnerability of structures based on their ability to withstand hurricanes—but major structural deficiencies are likely not properly accounted for, experts told S&P.
A firm hired to inspect the Champlain Towers South building in 2018 told the condo association’s board of directors that the foundation had major issues, particularly in the pool deck area, according to The New York Times. And if those issues were indeed contributors to the collapse, the failure to act by the board would constitute “a colossal failure” David Prager, managing director and insurance adviser with Kroll, said in an interview with S&P Global. But insurers can play a significant part in that process going forward.
“If I’m sitting on a board, I need someone who can ask intelligent questions about an engineering report—be it another board member or a building manager,” Prager said in the interview. “Insurers could play an important role in lessening structural risks of cooperatively owned residential developments by requiring that governing boards have construction engineers available to the full board or committees.”