Six Steps to Take When a Business Loss Occurs: The Self-Storage Operator’s Role in the Insurance-Claims Process
|Copyright 2014 by Virgo Publishing.|
|Posted on: 12/23/2010|
By Kay Schaefer
As a self-storage business owner, you took the time to find the right insurance policy to protect your company. You discussed coverage with your agent, and agreed on the property values and liability limits for your specific operation. But when choosing insurance to protect against loss or damage due to theft, tenant claims or injury, many owners don’t really think catastrophic events will happen to them.
When the unthinkable occurs―and it does―what do you do? You must file a claim with your insurance carrier, and you must protect yourself and your facility from further damage. Although most claims are handled quickly, they require your attention to detail. Knowing what to expect and how to advance the process will keep you sleeping at night―and isn’t that the reason you purchased insurance in the first place? By following the six simple steps below, the claim process should go smoothly.
1. Understand Your Policy
Immediately review your insurance policy so you understand what’s covered and what your deductible will be if one applies. The policy is a contract between you and the insurance carrier. It’s important to have the protection you want and not find out later that exposures you thought were protected under the policy are ultimately excluded from coverage. If you have any questions, ask your agent to review the policy with you.
2. Be Prompt
File your claim as soon as possible after an incident occurs with your insurance agent or through your carrier’s claim line, whichever has been provided to you. Be prompt―most policies have specific timeframes in which you must file a claim.
The person with whom you speak will have questions. Be prepared with information about the who, what, where and when of the claim. Take a moment to write everything down before you call, and keep a record for yourself. Include any available information on the injured party or witnesses including names, addresses and phone numbers. Good documentation goes a long way toward making the claim process painless.
The person taking the claim report will gather the information you provide and any other pertinent details or documentation. If you’re reporting to an agent, he’ll pass the report along to the insurance carrier.
Some business owners hesitate to file a claim because they’re concerned about the effect it could have on their future insurance coverage or premium. But if an incident has caused damage and timely reporting is not done, you could restrict yourself from ever having coverage for that loss. If you’re not sure if you should make a claim, talk to your agent. He’ll be familiar with the process for your carrier. He may want to put the carrier on notice but not actually file a claim until more information is gathered. This notice will protect your rights under your policy and meet the carrier’s time requirements.
3. Gather Documentation
Create any additional documentation needed by the insurance carrier. The more info you can provide, the easier the claim process will be. Different incidents will have specific information needs. Some of these include:
Inventory lists. If theft is involved, start working on an inventory list. The more details you have ahead of time, the easier it will be to create this list after the loss. Consider keeping an inventory on hand or a photo record of what’s in your office, apartment or maintenance shed.
Police report. You will need to file a police report in the case of theft, vandalism and, in some cases, accident or injury. Keep a copy of the police report for yourself and make one for your insurance carrier.
Photos. Pictures are beneficial. Take them before you start any cleanup or repairs. Photos taken prior to a loss also may be helpful when there’s a fire in the apartment or office. Pictures can help you with documenting what’s been damaged or destroyed, and also can serve as a refresher to what you had before the loss.
Historical records. If your claim includes loss of rent, historical records will be needed to document your loss of income. Your facility may have certain times during the year when rental rates go up. It may be necessary to look at prior years’ records to identify your loss if the incident occurs during a peak period of renting.
If a fire destroys one of your buildings right before your busy season, your rents immediately before the loss will be lower than if you could have rented the damaged building during the upcoming busy season. In that case, the insurance carrier would want to look at the same time period for prior years to verify the increased rent loss.
Tenant leases or lien documentation. If the event involves a potential liability claim related to a tenant’s stored property, good documentation is critical. The insurer will want a copy of the tenant’s lease. If it’s a sale and disposal claim, the carrier also will want documentation of the lien procedure.
Obtain the tenant’s current address and phone number, if not already on file. You may not be negligent or liable for his goods, but you must work with your insurance carrier to document the claim. This type of documentation is also one of the best ways to protect your business from customer claims.
4. Work With Your Adjustor
Find out what else the insurer needs to move forward with your claim. Your carrier should contact you with details on what it may need. An adjuster may come to your facility to inspect the damages and work with you to settle the claim. Repair estimates may be needed, so the carrier may ask you to obtain an estimate or two bids. Working closely with your carrier or adjuster will help get your claim approved and your check in the mail quickly.
5. Keep Records
Keep records of your costs, including invoices for repairs and additional expenses used to protect your property and reduce the claim. Make copies of everything before you send it on to your insurance carrier. Make a folder and organize copies of your loss documentation. This will make discussions with your carrier easier and help avoid conflicts.
6. Prevent Further Loss
Do everything possible to prevent additional loss from occurring. Whether filing a property or liability claim, it’s in your best interest to do anything reasonable to prevent another. Most insurance policies include a section addressing your duties after an incident and will tell you how to protect your property from further loss. Make any temporary repairs necessary to protect against greater damage. If in doubt, check with your insurance carrier about what’s reasonable.
Expect a phone call or visit from your insurer within a couple of days of filing your claim. If the loss is due to a catastrophe such as a tornado, there may be a delay due to the number of claims being made at the time.
Have your notes ready and complete any forms requested as quickly as possible, and your claim should be handled smoothly and quickly. By knowing what to expect from your insurance carrier when filing, you’ll be prepared to handle the unthinkable if it occurs.
Kay Schaefer is an employee of Deans & Homer, an insurance managing underwriter providing specialized coverage for the self-storage industry since 1974. Schaefer has more than 30 years of experience writing unique insurance coverage. For more information, call 800.847.9999; visit www.deanshomer.com .