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Surfside condo collapse impact on underwriting. Analyzing the location of the building, the construction materials, age and the quality of the systems within the structure help the insurer determine the likelihood of a building or structure being damaged before a catastrophic event occurs. (Photo: Felix Mizioznikov/Shutterstock.com)

The terrible collapse of the Champlain Towers South building on June 24, 2021, killed 98 people. Litigation is currently pending, and there are reports that $30 million in insurance coverage have been tendered to the court. The maintenance deficiencies that existed at time of collapse have also been widely reported. The question for the insurance industry is, does this change underwriting procedures or pricing to better reflect this risk?

Historically, property underwriters have used the acronym C.O.P.E. (Construction, Occupancy, Protection, Exposure) to evaluate property risk exposures. In this case, occupancy, protection and exposure are straight-forward, so we won’t spend any time on those aspects for this article. What we do want to discuss is construction.

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