Parking garages — lengthy thought-about benign dangers by property insurers — are going through extra scrutiny from underwriters and potential charge hikes as fireplace hazards enhance with the rising use of electrical vehicles and different fashionable automobiles.
Current incidents, resembling a hearth in a parking storage at London Luton Airport final yr that destroyed greater than 1,400 vehicles, have drawn consideration to the rising exposures insurers face when fires unfold quickly amongst a number of automobiles.
Regardless of security advances within the operation of automobiles, fashionable vehicles include extra flamable supplies resembling plastics. Efforts to regulate fires in garages that include charging stations and electrical automobiles powered by lithium-ion batteries may also be extra advanced, consultants say.
The flamable loading of automobiles has modified dramatically in recent times, mentioned Christopher Wieczorek, senior vp, senior engineering technical specialist, at FM International in Johnston, Rhode Island.
“There’s much more plastic utilized in automobiles, and it’s that larger plastic content material that’s driving this danger,” Mr. Wieczorek mentioned.
Giant-scale fires are affecting complete storage buildings, even open subject parking, and byproducts of fires resembling smoke can migrate to adjoining buildings, mentioned Invoice Ingram, Dallas-based vp of technical operations for Zurich North America’s resilience options division.
Traditionally, property insurers requested few questions when underwriting parking buildings, mentioned Mike Prindle, Atlanta-
primarily based senior vp and head of advanced property at CAC Specialty. “Now they’re asking questions,” he mentioned.
If a business workplace constructing with an hooked up parking construction has charging stations, insurers will probably be involved that there’s a better danger {that a} fireplace within the parking storage may unfold to the constructing, Mr. Prindle mentioned.
“If there’s that publicity, they do charge for it. It’s a better charge than it typically would have been,” he mentioned.
Insurers may also cut back capability.
“It may have an effect on their line measurement if it’s a shared and layered program. If it’s a single-carrier program, it’d have an effect on the quantity of capability that they will put out,” Mr. Prindle mentioned.
The character of parking storage fires has modified, mentioned Kevin Madden, New York-based managing director, actual property observe chief, at Aon PLC.
In property inspections, underwriters look to see if garages have charging stations and the place they’re positioned, he mentioned. Insurers are “solely starting to underwrite that publicity,” he mentioned.
Subterranean or street-level parking the place multifamily or business buildings are elevated above parking garages is being examined extra carefully by underwriters, significantly if there are charging stations, mentioned Mike Bugielski, Los Angeles-based senior danger management guide and space vp at Arthur J. Gallagher & Co.
Some organizations restrict electrical automobile parking both to ground-level flooring, or in some cases to the outside of properties, mentioned Michael Rouse, New York-based U.S. property observe chief at Marsh LLC.
New residential developments generally “particularly put parking for electrical automobiles, inclusive of charging stations, within the open air and never in a parking storage,” he mentioned.
Lack of superior security tools can also be a priority, and a few insurers have declined to write down parking garages as a result of they didn’t have sprinklers, mentioned Tom Lentz, Chicago-
primarily based chief technical officer and senior fireplace safety guide at Aon.
EV fires can final for hours and require extra water to extinguish, Mr. Lentz mentioned. “The quantity of warmth EVs generate once they go into thermal runaway is unimaginable,” he mentioned.
The 2023 version of the Nationwide Hearth Safety Affiliation 88A Customary for Parking Buildings requires sprinklers in all parking buildings, together with open parking garages. As of January 2021, FM International upgraded its hazard ranking for parking buildings from a class 2 to three due to the upper gasoline load content material in automobiles, Mr. Wieczorek mentioned.
Stephen Penwright, San Francisco-based giant property technical director for Zurich North America, mentioned the insurer has began to trace parking storage fireplace losses globally.
Lack of sprinklers in parking garages and the unfold of fireside from automobile to automobile are key components within the severity of those losses, Mr. Penwright mentioned. Many of those points come up the place parking garages are hooked up to casinos and hospitals, he mentioned.
Traditionally, these dangers have been thought-about mushy occupancies, as a result of they have been completely occupied, he mentioned. Now, underwriters are extra cautious of fires probably spreading to the constructing, which accounts for a lot of the worth of the placement, driving underwriters to take much less participation within the danger, he mentioned.
If garages don’t have sprinklers and the chance high quality deteriorates, “charges would go up,” however policyholders can modify deductibles or sub-limit areas to attempt to mitigate the potential charge enhance, he mentioned.
Dangers must be examined, mentioned Kevin Bates, group head of danger and insurance coverage for Australian development firm Lendlease Corp. in Sydney (see associated story beneath).
Parking buildings that include EVs and charging stations might enhance fireplace hazards in tightly packed areas that lack air flow, and introduce new dangers, he mentioned.
“It’s a really completely different danger to a concrete space the place individuals are available and park,” Mr. Bates mentioned.
Sprinklers, inspections assist mitigate hazards
Parking storage operators and homeowners ought to take proactive measures to scale back fireplace dangers together with pre-planning and walk-throughs with native fireplace departments, deploying early detection units and upgrading sprinkler methods.
Charging stations must be positioned by storage entrances or the place they are often simply accessed by fireplace departments, mentioned Kevin Madden, New York-based managing director, actual property observe chief, at Aon PLC.
“In the event that they’re outdoors, put them on the different finish of the parking zone. Don’t put them proper subsequent to the entrance doorways” of workplace or residential buildings, he mentioned.
Making certain that upgraded sprinkler methods are put in in parking buildings is crucial, mentioned Jeffrey John, San Diego-based account engineer, property & casualty, at Woodruff Sawyer & Co.
“Upgraded sprinkler methods gained’t (essentially) put out the fireplace, however they’ll quiet down the adjoining automobiles, stopping the fireplace from spreading,” he mentioned.
Thermal sensors and different units can be found that may detect irregular temperature readings, and these might be put in close to charging stations and the place automobiles are parked, he mentioned.
EVs and charging stations must be separated from different areas and tools frequently inspected, examined and maintained, mentioned Invoice Ingram, Dallas-based vp of technical operations for Zurich Resilience Options, a unit of Zurich North America.
If third-party corporations set up charging stations, contracts must be reviewed to verify restore and upkeep schedules and placement particulars, mentioned Mike Bugielski, Los Angeles-based senior danger management guide and space vp at Arthur J. Gallagher & Co.
