The 2018 Hurricane season is already underway and the National Oceanic and Atmospheric Administration (NOAA) is forecasting a potential of 10 to 16 named storms in the Atlantic. Given the catastrophic damage that took place last year, leaving many apartment communities with significant damage, it is key that the multifamily industry prioritize hurricane and disaster preparedness.
The Federal Emergency Management Agency (FEMA) and Congress have provided guidance regarding flood risk and alternative flood mitigation methods for properties that can’t be elevated. Additionally, FEMA offers their Ready Business Hurricane Toolkit that can serve as a valuable resource for apartment operators. You can also visit NMHC’s site for a number of resources that will help your firm prepare for, and respond to, natural disasters.
Hurricane and disaster preparedness is a critical part of an apartment companies risk management program and should be adopted across the country — not just near hurricane-prone coastal areas. Catastrophic flooding events occur in all states and regions across the country.
Firms should look at risk as it relates to their bottom line. According to industry experts, one of the most important – and costliest – risk issues is floods. For many, private flood insurance makes more sense than opting for the National Flood Insurance Program (NFIP). However, the problem is that not all firms have access to the private market in the first place.
Not having access to a robust private market, many firms’ only option is the NFIP. And while the NFIP is critical to guarantee coverage in all markets at all times, it puts limitations on both coverage amount and policy terms. Additionally, the NFIP doesn’t offer business interruption coverage for commercial and multifamily policyholders and doesn’t allow firms to obtain one policy for all properties in their portfolio. Another mounting issue: The NFIP will expire on July 31 without the reauthorization of the federal government. NMHC/NAA have been working to urge congress to reauthorize the NFIP and adopt program reforms that will free up private market insurance solutions and better cover the multifamily industry.