Parking garages – long considered a benign risk by property insurers – are facing greater scrutiny by underwriters and potential rate increases as fire hazards increase with the increased use of electric cars and other modern vehicles.
Recent incidents, such as a fire in a parking garage at London Luton Airport last year that destroyed more than 1,400 cars, have drawn attention to the increased risk faced by insurers when a fire spreads rapidly across multiple vehicles.
Despite safety advances in the operation of vehicles, modern cars contain more flammable materials such as plastic. Fire control efforts in garages that contain charging stations and electric vehicles powered by lithium-ion batteries may also be more complicated, experts say.
The combustor loading of vehicles has changed dramatically in recent years, said Christopher Wieczorek, senior engineering technologist, senior vice president, FM Global in Johnston, Rhode Island.
“There is a lot of plastic used in vehicles, and high plastic content is only increasing this risk,” Mr Wieczorek said.
Bill Ingram, Dallas-based vice president of technical operations for Zurich North America’s Resilience Solutions division, said large-scale fires are affecting entire garage structures, even open-field parking, and fire byproducts such as smoke are imminent. Can move into buildings.
Historically, property insurers ask few questions when underwriting parking structures, said Atlanta’s Mike Prindle.
The Senior Vice President and Head of Complex Assets is located at CAC Specialty. “Now they are asking questions,” he said.
If a commercial office building has charging stations with an attached parking structure, insurers would be concerned that a fire in the parking garage could spread into the building, Mr. Prindle said.
“If there’s that exposure, they give a rating for it. This is a higher rate than would normally occur,” he said.
Insurers may also reduce capacity.
“If it is a shared and tiered program it may impact their line size. If it’s a single-carrier program, it could impact the amount of capacity they have,” Mr. Prindle said.
The nature of parking garage fires has changed, said Kevin Madden, New York-based managing director, real estate practice leader, at Aon PLC.
In the property inspection, he said, underwriters look at whether the garage has charging stations and where they are located. “Insurers are only beginning to mitigate that risk,” he said.
Underground or street-level parking where multifamily or commercial buildings are higher than parking garages is being scrutinized more closely by underwriters, especially if there are charging stations, said Mike Bugielski, Los Angeles-based senior risk control advisor and area vice president of Arthur Jay. Are. Gallagher & Company.
Some organizations limit electric vehicle parking either to ground-level floors or, in some cases, to the exterior of properties, said Michael Rouse, New York-based U.S. property practice leader at Marsh LLC.
New residential developments sometimes “specifically place parking for electric vehicles, including charging stations, in the open air, not in parking garages,” he said.
The lack of advanced safety equipment is also a concern, and some insurers have refused to write parking garages because they did not have sprinklers, said Tom Lentz, Chicago.
Chief Technical Officer and Senior Fire Safety Advisor based at Aon.
Mr. Lentz said EV fires can last for hours and require large amounts of water to extinguish. “The amount of heat generated when EVs go into thermal runaway is incredible,” he said.
The 2023 edition of the National Fire Protection Association 88A standard for parking structures requires sprinklers in all parking structures, including open parking garages. As of January 2021, FM Global has increased its hazard rating for parking structures from Category 2 to Category 3 due to the high amount of fuel loaded in vehicles, Mr. Wieczorek said.
Stephen Penwright, San Francisco-based large property technical director for Zurich North America, said the insurer has begun tracking losses from parking garage fires globally.
Mr. Penwright said the lack of sprinklers in the parking garage and the spread of fire from one vehicle to another were major factors in the severity of these losses. Many of these issues arise where parking garages are attached to casinos and hospitals, he said.
Historically, those risks were considered soft occupancy, he said, because they were permanently occupied. Now, underwriters are more wary of fire potentially spreading in the building, which accounts for most of the value of the space, leading to underwriters taking less exposure to the risk, he said.
If garages don’t have sprinklers and risk quality worsens, “rates will go up,” but policyholders can adjust deductibles or sub-limit locations to try and minimize potential rate increases, he said. .
Kevin Bates, group head of risk and insurance at Australian construction company Lendlease Corp in Sydney, said the risks should be examined (see related story below).
Parking structures that house EVs and charging stations could increase fire risk in tightly packed spaces that lack ventilation and create new risks, he said.
“It’s a very different risk to a concrete area where people come and park,” Mr Bates said.
Spraying, inspection help reduce hazards
Parking garage operators and owners should take proactive measures to reduce fire risks, including pre-planning and walk-throughs with local fire departments, deploying early detection devices and upgrading sprinkler systems.
Charging stations should be located near garage entrances or where fire departments can easily access them, said Kevin Madden, New York-based managing director, real estate practice leader, at Aon PLC.
“If they’re outside, put them at the other end of the parking lot. “Don’t place them right next to the front door of office or residential buildings,” he said.
It’s important to ensure that advanced sprinkler systems are installed in parking structures, said Jeffrey John, San Diego-based account engineer, property and casualty at Woodruff Sawyer & Company.
“Upgraded sprinkler systems won’t (necessarily) extinguish the fire, but they will cool adjacent vehicles by preventing the fire from spreading,” he said.
He said thermal sensors and other devices are available that can detect abnormal temperature readings, and these can be installed near charging stations and where vehicles are parked.
EVs and charging stations should be isolated from other areas and the equipment should be regularly inspected, tested and maintained, said Bill Ingram, vice president of technical operations for Dallas-based Zurich Resilience Solutions, a unit of Zurich North America.
If third-party companies install charging stations, contracts should be reviewed to check repair and maintenance schedules and location details, says Los Angeles-based senior risk control consultant and managing director Arthur J. said Mike Bugielski, area vice president of Gallagher & Company.
