The Issue of Betterment in Building Repairs

Nick Turner, Head of Surveying, Woodgate & Clark takes a look at the issues surrounding insurance funded repairs to property and ESG compliance.

On the road to net zero, one of the key challenges in property repairs is understanding the impact of the products used. It not a simple case of specifying low carbon materials because they may not be available, suitable for the application or the transport costs might simply outweigh the benefit of the material itself. But knowing the carbon footprint of materials is just one part of the challenge. The additional consideration for the insurance market is ‘betterment’.

First, looking at measuring carbon footprint, embodied carbon is the total carbon emissions of all building materials and products and the construction involved to put them together. It accounts for about 20% of the carbon emissions from the building sector. But it is just one factor when considering carbon emissions associated with a material used in building repairs. There is the risk of toxic emission release, such as chloride, formaldehyde, toluene and ethylbenzene and microplastics leaching out from plastic-based materials into waterways.

The carbon cost of extracting the raw material, processing it, transport to the place of manufacture, manufacturing the final product, transporting to site, installing the product, wastage on site and disposal when the building is demolished must also be considered.

A material such as timber, appears to be an ideal material for construction. It has low embodied carbon, it is sustainable, economic and has many uses. However, diesel and petrol machinery is used to harvest and transport the raw material, gas is used to dry it and convert the logs to planks or sheets. It is then transported by road, rail or even sea, to be processed into the final product or sent to site. Here more energy is used to ensure the timber is suitable for its use, often creating a lot of waste.

Once incorporated into the building it acts as a carbon ‘sink’ until the building it is in, is demolished, at which point, if the timber is burnt, all the carbon is released.

The construction industry has accepted a responsibility to reduce its carbon footprint and developments in materials, construction techniques, waste reduction, recycling and transport are continuing. The industry will also have to look at reducing waste on site and at ‘clean fuels’ to power the machinery on site and used to transport materials.

COSTS

Until lower carbon options become ‘the norm’ the costs for some products and processes may be higher than traditional materials and methods. It’s also important to understand that some materials may cost more up front but are more economical to use in the whole life of the building. In this respect, as building owner and user, the longer-term economics would make sense.

Insurers may have a different view as they are not invested in the whole life cost of a building. They are paying for repairs to buildings owned by others following an insured event and will be focused on the repair cost.

The question therefore is what incentive there is for insurers to repair using low carbon alternative materials or techniques, when the cost of doing so is higher than repairing with traditional materials?

Adjusters have a duty to ensure that there is no ‘betterment’ when it comes to agreeing the repair specification. Any material that is of a higher standard/performs better could be considered betterment, especially if it costs more than the damaged material.

If, for example, gypsum plasterboard has been damaged, an adjuster could not agree to a repair schedule that specified a low carbon and more expensive alternative under current policy wordings.

That is, unless policies were to allow for such alternatives to be considered.

Any such longer term view on material choices for repairs would need to be factored into the economics of the cost of Insurance. That would require a much wider debate with contributions from all corners of the insurance market and the consumers and businesses it serves.

Read Woodgate and Clark’s series of articles on Low Carbon materials at: https://www.woodgate-clark.co.uk/media