Twenty-seventeen was a year plagued by natural disasters including fires and floods. As Sunrise Management's CEO Joe Greenblatt recently told GlobeSt.com, the recent wildfires throughout Northern and Southern California have had devastating consequences on both business and residents, so renters and landlords need to review their insurance policies. The fires caused thousands of structures to be destroyed, dozens of deaths, more than 500,000 acres burned and billions of dollars in property damages.

In addition, as GlobeSt.com recently reported, earthquake risk seems to be on the minds of a number of CMBS investors, according to Kroll Bond Rating Agency. The concerns focus on the potential impact of an event, whether large or small, and on assets that may not be adequately insured, if at all. While insurance is generally required for properties in seismic zones 3 or 4 with a probable maximum loss/PML greater than 20%, properties that are close to this threshold could still suffer moderate to significant damage in an earthquake, but fall under the insurance threshold, says Kroll. This could meaningfully impact the collateral securing a loan, and the potential for losses if uninsured borrowers choose to forgo repairs and surrender the asset to the lender.