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Insurance Versus Construction Costs for Low-Rise Multifamily Dwellings

• ID:

  59

• ESCSI:

  3220.018

• Author:

  Hurst, James P.

• Publication Name:

  MOTI Letter #4-87

• Type of Publication:

  Paper

• Publisher:

  ESCSI

• Dated:

  1987

• Issue/Volume:

  April

• Other ID:

• Page(s):

  1-5 + tables

• Reference List:

  N

• Abstract:

  For many years now, it has been commonly believed that constructing low-rise multifamily dwellings with concrete and masonry is overly expensive. It is still cited today in some of the model code publications that the gap between a frame and concrete and masonry structure of this type is about $10 per square foot or more. There is now evidence to show that this truly is a misconception. Not only is the gap between these two types of construction much closer, but because of differences in insurance premiums, it is actually substantially less expensive in the long run to construct with concrete and masonry products.The information that follows will affect developers, landlords, prospective buyers of buildings, tenants, and even the general public.
  Provided below is an example which illustrates how the insurance industry in Texas applies rates to low-rise, multifamily dwellings, of various construction types. Although the example is specific to Texas, the concept can be universally applied virtually to anywhere in the United States, with similar results.