Download Residential State Energy Code Status

FEBRUARY 2011
C.O.D.E.
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Insuring Buildings on a Value Basis
What is a Value Basis of insurance and why does
it matter? Property insurance contracts contain
Welcome to the second issue
wording that defines how much an insurer is
of the CODE – Construction
Overview and Data Exchange. obligated to pay for a loss, and that depends upon
It is our intent to share with
what basis the value of the policy was derived.
you our knowledge of the
construction industry including the latest building trends,
market pricing variations,
what’s happening with
building materials, labor
wages, and various other
data points that may impact
your business.
We will publish six issues a
year and future issues will
cover a variety of subjects,
such as building codes, housing statistics, government
indicators and economic
trends. Every issue will
answer FAQs and highlight
specific subjects requested
by you in the Ask the
Pros section.
As the Building Cost People,
it is our pleasure to share our
in-depth knowledge and data
with you. Enjoy!
– Norrine Brydon
Vice President, Data Asset
In this Issue:
• Insuring Buildings
• New Energy Code
• Energy Efficient Walls
• Ask the Pros
• FAQs
• Data Points
MSB provides valuation results for three distinct
value bases: Actual Cash Value, Replacement Cost
New, and Reconstruction Cost.
Definitions
Actual Cash Value: The cost to repair or replace
the damaged property with materials of like kind
and quality, less depreciation. The value is related
to the age, present condition and suitability for use
of the asset. The worth of a building or structure
is found by looking at the wear and tear from use,
structural defects, building service deficiencies and
exposure to elements.
• loss of economies of scale associated with one-off
new construction
Replacement Cost New: The cost to replace an
equally desirable substitute structure, having the
same function or purpose as the original, without
necessarily reproducing exactly the same characteristics of the property, but using today’s materials, labor, and building techniques.
• higher costs for trades and premium prices
for materials
Reconstruction Cost: The cost that would be
incurred in constructing a replacement having
exactly the same characteristics as the original
improvement. It might be impossible, impractical,
or unacceptable today to use the original materials or methods, so many policies allow near-exact
reproduction. A good way to think of the reproduction costs incurred, is to think about reconstructing
a designated historical building.
The Reconstruction Cost valuations in MSB tools
include site-specific and process-related costs that
would not be included in Replacement Cost New
valuations, such as:
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• extra costs due to site accessibility and limited
site mobility
• the usual sequence of events in the building process may have to be altered when reconstructing
after a loss
• extraordinary fees and other contingencies
• retrofitting new systems to undamaged building
components or mechanical systems below
grade level
• time urgency required to mitigate Business Interruption and/or Additional Living Expenses losses
• presence of dangerous/hazardous materials
and/or mold concerns (but not including
remediation costs)
• consideration for adjoining non-construction areas
or insured’s undamaged property on site
Each value basis has a purpose, and what matters
is the context in which the resulting value will be
used. A user of a valuation tool must be aware of
the implications of choosing a value basis and must
select the one that best meets the requirements of
the policy.
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Future Energy
Code Requirements
Industry experts estimate that buildings consume
as much as 40 percent of all the energy consumed
in the United States. In an effort to improve the
energy efficiency of buildings, many state and
municipal governments have adopted a model
energy efficiency code, called the International
Energy Conservation Code (IECC). The IECC was
created in 2000 by the International Code Council
(ICC), a U.S. based non-governmental organization
with government members from around the world.
The IECC is updated every three years, 2009 being
the most current edition. The commercial and
residential sections of the proposed IECC 2012
code will achieve the goal of using 30 percent less
energy for new buildings versus those built using
the 2006 standard. Some of the changes to the
residential and commercial code include:
• Sealing and testing of HVAC ducts
• Increasing insulation R-value in walls, ceilings,
windows and foundations
• Improving lighting efficiencies/day-lighting
controls
• Reclaiming wasted energy from hot water
systems
• Commissioning and validation of mechanical
systems
The IECC 2012 code will be up for adoption by
municipalities over the coming months and years.
The process is different for each state where some
have adopted an older code or none at all. Sixteen
states already meet or exceed 2009 IECC. The
Building Codes Assistance Project tracks the status
of energy codes used within the United States.
The map depicts the status of the code in use for
each state.
• Making commercial buildings more air tight by
requiring continuous air barriers
Residential State Energy Code Status
AS OF JANUARY 1, 2011
State/territory
residential energy
code status as of
January 2011:
Residential State Energy Code Status as of January 1, 2011
NH
VT
*
• 14 with no
state-wide code
or precedes
1998 IECC
MA
RI
CT
NJ
DE
MD
DC
*
• 8 meet or exceed
1998-2003 IECC
*
• 17 meet or
exceed 2006 IECC
AS
GU
MP
• 16 meet or exceed
2009 IECC
PR
VI
*
meets or exceeds 2009 IECC or
equivalent
meets or exceeds 2006 IECC or
equivalent
meets or exceeds 1998-2003
IECC or equivalent
no statewide code or precedes
1998 IECC
state has adopted a new code
NOTE:
mandatory statewide codes
Get all the most up-to-date code status maps and other valuable resources at www.bcap-ocean.org
Increasing the energy efficiency of building systems has many wondering what it is all going to cost.
Current data on buildings that have already incorporated Green design practices have demonstrated a
20-30 percent energy savings while averaging a cost premium of 1 – 2 percent. MSB continues to track
energy code changes by state and to incorporate new standards into our products to accurately
represent changing construction and methodology costs.
M a r s h a l l
&
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Energy Efficient Wall Systems
The ancient Greeks and Romans understood
the value of thermal mass to regulate internal
temperatures in their shelters. Early stick-frame
dwellings in cold climate areas of North America
purposely left cavities created by stud framing
uninsulated, hoping the trapped air would act as
an insulator. Sometimes it did; but most often it did
not and air leakage caused drafts It was not until
the oil crunch of the 1970’s that designers in the
U.S. started taking seriously the necessity of better
insulation. Today, we use thermally resistive thinwall design to moderate temperature and control
energy loss. Today, that wall cavity is filled with
insulation, the building envelop is sealed tightly,
and buildings are becoming “super- insulated.”
Building super energy efficient homes, whether
for cold or hot climates, requires walls constructed
with higher insulation standards with R-Values in
the 40’s. So what are the advantages of a super
insulated home you ask? How about lowering the
heating load by as much as 90 percent, without
needing high-efficiency mechanical systems?
• Super-insulated homes come in two types today:
• Passive Home
• Net-Zero Energy Home (NZEH) , or Zero Energy
Building (ZEB), as it is sometimes called.
Passive Home design results in a ultra low energy
building requiring little energy for space heating
and cooling. A ZEB generates energy, and over a
year does not use more energy than it generates.
Passive House and ZEB are complementary synergistic technology approaches, based on the same
physics of thermal energy transfer and storage:
ZEBs drive the annual energy consumption down
to zero from the already low Passive Home with
help from on-site renewable energy sources.
M a r s h a l l
&
In the case of Passive Home designs, a furnace
is not required at all. The concept is actually
quite simple:
Super insulated homes
• Build 12 inch wall cavities filled with insulation
air quality and use less
• Use triple glazed, gas filled windows
energy. Lowering the
• Make it air tight while managing moisture
demand for energy
• Recover and reuse the heat
Ok, this is oversimplified, but truth be told, it is
not that difficult to achieve a Passive Home or ZEB.
The cost premium directly relates to the experience of the designer and builder in constructing
the level of envelope quality this type of super
insulated home requires. Katrin Klingenberg of the
Passive House Institute US, estimates the cost to
build a super-insulated home is about 10 percent
more than one using current building standards.
There are several different methods available
to achieve the walls of super insulated homes,
such as: Double Wall Construction; Passive House
Method; Larsen Trusses; Exterior Foam Insulation;
Structural Insulated Panels.
are more comfortable,
provide better indoor
makes super insulated
homes more appealing
(reduction of 90 percent
heating load!!). As
energy conservation
needs increase, the
“super insulated” home
concept may well be
the path green buildings
ultimately take.
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Check to make sure that any worker, whether a window installer, a
painter, or a renovator, is trained and certified under the Lead-Safe Program
administered by the United States Environmental Protection Agency.
Ask the Pros:
Lead Paint Remediation
in Older Homes
If there is a subject
or topic that you would
like to see discussed,
please email us at
[email protected]
Lead-based paint was used in more
than 38 million homes until it was
banned for residential use in 1978.
According to some industry experts,
an insurer could be considered a
contractor by managing more than one contractor
firm, which can make the insurer legally responsible
for the health and safety of workers on a restoration job that involves hazardous materials. Usually,
the culprit in question is asbestos, but lead paint
can also be a problem. Adjustors are usually advised to check with occupational safety and health
administration to figure out how to avoid liability.
Total losses involving fire will result in the vaporization of lead paint, making cleanup virtually
impossible. In a total loss situation, debris containing hazardous material is removed in bulk and
particulates may be contained using dust control
methods, such as wetting.
Repair work performed in partial losses and in
areas containing lead paint involves careful removal
and storage of blistered or peeling paint in the
immediate vicinity of the damage, or adjacent
to fire damaged areas. Wetting down of these
Age of Homes
Percentage of Homes Likely to Contain Lead
When dealing with losses in
houses containing lead paint, the
best advice is to hire a contractor
experienced and certified in lead
paint removal.
Check to make sure that any worker, whether
a window installer, a painter, or a renovator, is
trained and certified under the Lead-Safe Program
administered by the United States Environmental
Protection Agency.
MSB’s IntegriClaim tool displays a list of items that
can apply to dealing with costing hazardous waste
disposal, such as lead paint testing before and after
restoration, containment and air-lock chambers,
and bagging and removal of materials. Lead paint
removal can be treated the same as asbestos
removal to capture that cost using the MSB tools.
24%
Between
1960 - 1978
69%
Between
1940 - 1960
87%
Before 1940
10
M a r s h a l l
areas helps control dust dispersal that could
impose a health hazard after reconstruction,
especially to children. Some inexperienced
contractors may use torches to melt and scrape
paint from surfaces, and this is highly dangerous
due to the vapours produced.
&
20
30
40
50
60
70
80
90
100
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FAQs
How to Calculate Total Living Area in RCT
Total Living Area is a term specific to MSB and RCT.
The official MSB definition of TLA is “the area of
the main home in square feet (SF), plus each
section or wing, based upon exterior dimensions.
TLA includes the area of all floors and built-in
garages, but does not include the area of the
basement, porches, breezeways, balconies, decks
or attached garages.”
Calculation of TLA uses exterior dimensions, never
room or interior measurements. TLA includes the
area on all floors, excluding the basement. The
area of a tall or two-story foyer should be included
only once in the calculation, in the floor area of the
main floor only, and should not be included in the
upper floor area. The area occupied by stairways
should be included in each floor serviced by the
stair. Areas that protrude beyond the surface
of the exterior wall, such as chimneys, fireplaces,
windows or balconies, should not be included
in TLA.
Total Living Area should also include the area of
built-in garages. By definition, a built-in garage is
placed into the residence at the first floor or grade
level, and has living area above the garage and on
at least one or two sides of the garage. A one story
home cannot have a built-in garage.
Total Living Area should exclude the area of a
basement; finished or otherwise. A Finished
Basement is one that has: drywall or other wall
finish installed over insulation around basement
perimeter; interior partitions with drywall or
other wall finish; passage doors; finished ceiling;
carpet, vinyl tile or other floor finishes; electrical
outlets and lighting; and a heating system. Enter
basement information at Foundation Type in RCT;
go to Additional Information to enter Finished
Basement information.
Also, TLA should exclude the area of a finished
attic. A finished attic is defined as the “build-out”
of the space immediately below a roof that does
not have adequate roof pitch/slope or ceiling
height to qualify the property as a half or threequarter story dwelling. Minimal partitions and an
inexpensive grade staircase to access the space
have been provided. Most likely, this space will
not meet most definitions of living area. Finished
Attics can be found on the Interior Features tab,
at Other Interior Items.
The accuracy of the replacement cost produced
in RCT is dependent on the entry of accurate
information and we know that one of the most
common user mistakes is the entry of TLA.
We hope this helps!
How to handle different types of Garages
Attached Garage: Enter TLA of home plus select ”Attached” garage
Detached Garage: Enter TLA of home plus select ”Detached” garage
Note: Detached Garage will be handled as a separate structure
Built-in Garage:
Enter TLA of all levels of home plus add the SF of the built-in garage space
Note: RCT will automatically calculate the finished Floor Area (FFA) by
excluding built-in garage to perform cost calculation
Basement Garage: Enter TLA of home plus select “Basement” garage
Carport: Enter TLA of home plus select “Carport”
A garage connected to the main home by a breezeway may be considered an attached garage
depending on individual carrier underwriting guidelines.
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Data Points
Commodity Watch: Copper Prices US
Factoids
The price of copper rose from $4.35 per pound to $4.50 per
pound between January 14 to February 11, 2011, as reported
by the London Metal Exchange.
LME Copper – Settlement 90 Days - $/LB
4.75
Copper imports by China grew by 5.7% in January and copper
reached a record $10,160 a ton February 7. Some analysts
predict aluminum will replace copper in some applications,
driving prices higher for that metal.
4.50
4.25
4.00
Copper is used in construction products such as: lighting,
wiring, plumbing, metal roofing, hanger nails and fasteners,
flashing, and control joints. Copper alloys produce brass
and bronze, each used in a wide variety of architectural
and engineering products such as valves, hardware, and
decorative elements.
3.75
3.50
11 Nov, 2010 - 10 Feb, 2011
Metalprices.com
Gas Trends
US (G)
Canada (L)
Feb 22 2011
$3.17
C$1.13
Dec 22 2010
$2.98
C$1.09
Gasoline prices continue to rise. The three-month average
percentage change for the U.S. was 6.3 percent, while Canada’s
prices rose 3.6 percent. Year-over-year average percentage
changes were 19.1 percent for the U.S. and 14.1 percent for
Canada. Fuel throughput charges and fuel taxes raise the price
of construction goods and services delivery, and create
inflationary wage pressure.
One Year
$2.66
C$0.99
Fuel prices impact construction costs in 3 ways:
Regular Gasoline Average Prices
1) Impact on petroleum-based products including plastics,
cement, gypsum, roofing materials, PVC piping, siding,
asphalt;
Current Trend
Steady
Decrease
2) Materials that are transportation-intensive such as lumber
will have pricing pressure during periods of rising oil prices;
Increase
3) Materials that require large amounts of energy to produce,
such as steel, are also impacted by fuel prices.
Building Stats
Dec-10
Jan-11
Housing Starts
520*
596*
14.6%
Building Permits
627*
562*
-10.4%
Description
% Change
Housing starts for January 2011 improved 12.6 percent since
November 2010 and 14.6 percent over December’s numbers.
Building intentions continued to drop, however, with building
permits decreasing -11.5 percent since November 2010.
• The average age of owner
occupied housing in the
United States is 35 years.
(Source: U.S. Census Bureau)
• As of December 2010,
15.7 million homeowners
had negative equity in
their homes. The total
represented 27 percent of
mortgaged single-family
homes. The median value
for a U.S. single-family home
was $175,200 in the fourth
quarter, down 2.6 percent
from the end of September
and 5.9 percent from a year
earlier. Values have fallen 27
percent from the June 2006
peak. (Source: Zillow)
• Nationwide, housing starts
declined 4.3 percent to a
seasonally adjusted annual
rate of 529,000 units in the
final month of 2010, according to newly released figures
by the U.S. Commerce
Department. While this was
the slowest pace of starts
activity since October 2009,
the year-end data indicate
that production of new
homes improved 6.1
percent in 2010 from the
previous year.
* thousands
U.S
$6,700
Jan-11
Dec-10
Nov-10
Oct-10
Sep-10
Jul-10
Aug-10
Jun-10
Apr-10
Marshall & Swift/Boeckh LLC
May-10
Mar-10
Jan-10
Feb-10
Publisher:Guy
Kopperud, 25 years experience as a manager
$6,600
within
$6,500the building industry. Expertise in construction code
and
building practices. Construction Defects Expert. Certified
$6,400
B$6,300
-General, California Licensed General Contractor ,Certified
$6,200
HERS
Rater, CHEERS Core Module/Energy Auditor CIE, IAQA
$6,100 Indoor Environmentalists, Certified EIFS Inspector,
Certified
$6,100
EDI
,Certified Real Estate Inspector
Publisher:Glen Wither, 32 years in the construction and
building information industry. Practicing architect.
Contractor. Expertise in housing data and construction cost
research, remediation specialist and professional services
including insurance risk evaluation and federal housing
rehabilitation design and project management
Editor: Norrine Brydon
www.msbinfo.com
Phone: 800.809.0016
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New Berlin, WI 53151
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