Insurance Challenges By Jordan Fisher, FRESCo Rebates and support for equipment upgrades are available to landlords. The Issue With the insurance industry experiencing its most challenging period in years, many building owners are facing significant increases in insurance costs. In some cases, landlords are receiving outright rejections from insurers. This is particularly true for older buildings, with older infrastructure. Unfortunately, as 80 per cent of B.C.’s apartment buildings are more than 35 years old, and many of these have equipment that is well past its rated life, this represents a huge portion of the rental housing market. Insurers are looking for opportunities to lower risk. An important way to do this is to show that major building components, such as boilers and water heaters, have been upgraded recently. James McCracken of Megson FitzPatrick Insurance Services explains: “Upgrading building systems (including heating, hot water and ventilation systems) will improve the insurability of older buildings. Aging building infrastructure can lead to insurance claims, and because of this, many insurers will not entertain insuring older buildings unless they have been fully upgraded. In this ‘hard’ insurance market, informing insurers of building upgrades…is very important as it makes the property more attractive to underwriters.” Aging heating, hot water, or ventilation equipment not only presents risks from an insurance perspective. Unexpected failure of this equipment can lead to significant disruption for tenants and a huge headache for owners and managers. “Emergency” equipment replacements can cost significantly more than planned replacements. It can also lead to a rushed process where there isn’t time to find the best solution. Whatever install you do get, you’ll be stuck with for many, many years to come.
The Opportunit y The good news is that upgrading to modern, efficient equipment not only helps reduce risk, it also helps conserve energy and reduce utility costs. If your building needs equipment upgrades, there are resources and rebates available to help, such as FortisBC’s Rental Apartment Efficiency Program (RAP). RAP is a free program that helps owners and managers of buildings nine units and larger reduce natural gas consumption by up to 27 per cent and lower water bills. This B.C. wide program is largely known for its free supply and installation of water efficient shower heads and faucet aerators, as well as free energy assessments. More than 1,000 buildings have taken advantage of this program. Many landlords are not aware that the program also includes optional implementation support for upgrades to heating boilers, hot water systems, and make-up air units.
Implementation support includes free support from a professional engineer, an independent expert that can develop specifications for equipment replacements, confirm exact rebate amounts, and assist in getting quotes from qualified contractors. The engineer reviews contractors’ proposals and provides landlords with a business case that outline their options, including costs and estimated savings. The engineer also reviews installations once they are completed to confirm they meet the specifications. Finally, they take care of the paperwork for processing rebates for high efficiency equipment.
What to do if you think your building may benefit from an upgr ade If you’re not sure whether your building may benefit from an upgrade, RAP’s free energy assessment can help you evaluate the situation. This professional evaluation of your building will provide estimates of costs and savings for upgrades of older components, including up-todate details on rebates for new, efficient equipment. For example, rebates for water heaters have just increased, and a new rebate for condensing make-up air units was recently introduced. Summer is the ideal time to replace heating equipment as winter replacements can be challenging to do without additional costs and tenant disruption. As it takes time to evaluate your options, develop specifications, get quotes, and schedule installations — begin the process right away to ensure you have enough time. Jordan Fisher is an energy efficiency consultant with FRESCo (www. frescoltd.com) and the implementation contractor for the FortisBC RAP program. He and his team have helped over 1,000 rental buildings, representing over 48,000 units, improve their buildings and reduce operating costs. For more information on the RAP program go to fortisbc.com/ apartment, email apartmentrebates@fortisbc.com, or call 1-877-327-6137.
SPRING 2020 | 15
