Home Sprinkler Report Finds Meager Insurance Discounts

The International Code Council's Sept. 21 approval of a residential fire sprinkler requirement for all new one- and two-family homes and townhouses doesn't settle the dispute about their cost, and a new report from the NFPA-sponsored Fire Protection Research Foundation adds fuel to that fire. The cost of sprinkler systems to the homebuilder ranged from 38 cents to $3.66 per sprinklered square foot, with an average of $1.61 per sprinklered SF, according to the "Home Fire Sprinkler Cost Assessment," which is dated Sept. 10, 2008, and has been posted by NFPA. (Newport Partners of Davidsonville, Md., prepared it.)

The researchers collected three building plans and cost data for each of 10 case study communities (nine U.S. communities and one in Canada). They found one, Wilsonville, Ore., that offers a credit to offset the cost of sprinklers; there, total sprinkler system costs to the builder averaged $1.49 per sprinklered SF. The total cost for sprinkler systems to the builder ranged from $2,386 to $16,061 for the 30 houses.

The authors checked for homeowners' insurance premium discounts, asking five insurers in each location that had significant market share in that states. While they said their discounts ranged from 0 to 10 percent for home sprinklers, averaging 7 percent, actual quotes showed annual discount savings averaged only $22 -- 3.42 percent of the annual premium. "The difference in this discount compared to the average percentage discount found in the survey is likely due to the disconnect between generally quoted ranges and the real discounts allowed on real policies. As sprinkler systems become more common in given areas and this discount becomes a more common topic in the consumer-insurance agent dialogue, it is anticipated that actual discounts would more closely track with general ranges," the study states.

The ICC vote took place in Minneapolis and changed the International Residential Code (IRC), with the sprinkler mandate set to show up first in the 2009 IRC. Advocates of the change said 46 states use the IRC as the basis for regulating new home construction.

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