By David Wilhite

What do you think is the most common naturaldisaster occurring in the United States today? Judging by thepopularity of such recent blockbuster films as Twister, Volcanoand Dante's Peak, one might easily guess that 200-plusmile-per-hour tornadoes (complete with flying cows) and thevolcanic destruction of Los Angeles are normal, everydayoccurrences. Despite what Hollywood would lead you to believe,however, the truth is that the vast majority of all naturaldisasters--more than 90 percent--that occur in the United Statestoday are flood-related.

Floods are more than 25 times as likely to occur in high-riskareas than fire. Yet, of the estimated 10 to 12 million businessowners who should have flood insurance, approximately 7 to 9million are not covered. Unfortunately, far too many self-storagefacility owners fall into this group. For example, there was amajor flood in New York last year that resulted in 1,298 floodclaims totaling nearly $1.5 million in damages, but only 92 ofthe claims were actually covered. Part of the reason for thissituation is that many people don't find out that their insurancedoesn't cover flooding until it's too late. But what's even moresurprising is that many business owners, including those who havepersonally sustained flood-induced losses, choose to go withoutflood insurance, perhaps in the belief that flooding is aonce-in-a-lifetime occurrence that only strikes high-risk areas.Nothing could be further from the truth.

The National Flood Insurance Program (NFIP) divides risk areasinto three basic groups: low, medium and high. Less thanone-third of all reported flood claims come from high-risk areas,and more than one quarter come from low-risk areas. That's whymost business insurance experts strongly recommend that yousecure flood insurance, even those in low-risk areas. Remember,your facility doesn't have to be located near a river or a laketo be at risk; heavy storms, winter run-off and local drainageproblems can cause just as much destruction as local waterwaysoverrun by spring rains.

The good news about flood insurance is that you can getaffordable coverage, even if your facility is located within theboundaries of a flood plain. The National Flood Insurance Programand its Write Your Own (WYO) servicing companies guaranteecoverage for anyone living in a high-risk area, regardless oflocation. Flood insurance averages about $300 per year forbusinesses (and just $150 per year on average for homeowners),and a special low-cost Preferred Risk Policy is available forthose businesses located in less-hazardous areas. Keep in mind,however, that while you can purchase flood insurance at any time,there is a 30-day waiting period from the date of yourapplication before coverage goes into effect. You can't just callyour agent when the rain begins to fall to put coverage in place.

The maximum amount of flood coverage currently availablethrough the National Flood Insurance Program is $250,000.Depending on the area where you live, though, it may not benecessary to purchase flood insurance at maximum amounts. If youare located outside a designated high-risk area, you can purchasepartial coverage and receive an ACV (actual cash value) payoutfor damages up to the purchase amount. However, if you have a lotof equity in your buildings and property, you may want toconsider purchasing Excess Flood Protection, which is availableup to twice the regular limit. This extra protection may be veryprudent given today's inflation and excessive construction costs.

Last, but not least, don't wait until disaster strikes yourbusiness. Assuming you have or are planning to get floodinsurance for your self-storage facility, now is a good time totake preventive action to minimize your flood-risk exposures andreduce damage claims. The following checklist will help you getstarted:

Pre-Storm Considerations

Flood Watch Precautions

Post-Flood Activities

Remember, there is a 30-day waiting period from the date ofyour application for flood insurance, so don't wait; one lowannual premium can protect you and your self-storage facility.

David Wilhite is the marketing manager of UniversalInsurance Facilities Inc. Universal offers a complete package ofcoverages specifically designed to meet the needs of theself-storage industry, including loss of income, employeedishonesty, comprehensive business liability, hazardous-contentsremoval and customer storage. For more information, contactUniversal at Box 5400, Scottsdale, AZ 85261-9957; phone (800)844-2101; fax (602) 970-6240; Web: www.vpico.com/universal.