If you notice a large number of your customers decline insurance coverage, it may be time to review the program you’re offering to make sure it provides value for your tenants. Does the program offer zero-dollar deductibles? Replacement-cost coverage? A wide range of available coverage limits and premiums? Features like these are available in the marketplace. Participation is the key to success when it comes to tenant insurance. Evaluate your program annually to ensure you’re offering a program with high value for your customers and benefits for your business.
What would you do if your facility experienced a fire, roof leak or flood?
Driscoll says he has experienced several roof leaks and a flood. His first action was to limit the damage by stopping the source of the leak, followed by notifying the tenants, insurance and his supervisor. “If unable to contact the tenant, I entered the units and determined the extent of damage and took whatever action necessary to prevent further damage,” he says. “Tenants who reported damage were offered dry units and assistance with moving their things. Boxes, tape, dry rags, etc., were provided at no cost, and free rent [was provided] for one or two months. As a result, we were never sued and lost very few tenants.”
Randy Lucore (RandyL) of CR Area Storage in Cedar Rapids, Iowa, has experienced all three scenarios. In the case of the fire, his first action was to reach the facility to assess the damage before alerting tenants. “We contacted the tenants whose units were in the same building [as the fire] but had not been damaged yet so they could get there before smoke/fire/water got to their unit,” Lucore recalls. “Then we contacted the people with units who had damage. Unfortunately for them, they did not need new units, but we relocated people elsewhere in the building. We rented a dumpster for the tenants with damage. When it was cleared out, we rebuilt the building.”
During his experience with flooding, Lucore says his facility and local residents had about four days to prepare. “We contacted all tenants more than once in those days leading up to the flood,” he says. “We had employees onsite to assist in rearranging units to get items off the floor or to put less expensive stuff lower than more valuable items. Or, if people had a place for items, we helped them move out. On the day the river crested, most roads from our facility were already closed. We stayed as long as local authorities would let us.”
Employees and tenants were not allowed back into the facility for a week. Driscoll says the facility’s first course of action was leaving the doors open on all empty units to dry out. In some cases of occupied units, a notch was removed from the tracks to allow the doors to be locked with about a foot of open space at the bottom. Once the facility was prepped, tenants were allowed to inspect their units. The facility helped haul unwanted items away.
To preserve saved or undamaged property, the facility used dry, vacant units as temporary storage spaces. “We tried to arrange as many empty units in a building at once for cleaning,” Lucore says. “We left a buffer of one empty unit around the cleaning area to occupied area. Then we worked on getting tenants who had stuff to store into new clean units. This whole process took six weeks, start to finish.”
What SHOULD you do?
Schaefer: Secure the area to restrict public traffic into the area. Allow for emergency-response units to investigate the incidents. Take photos, contact the tenants and keep notes of your efforts. The fire or water damage may have created serious hazards that could harm your employees and customers, and these need to be attended to before allowing access to the area. Take any reasonable steps to prevent further property damage. Emergency repairs to abate a problem, such as a roof leak or permanent smoke damage, are often covered by insurance as they reduce a continued or increasing loss created by the initial cause.
If there has been any known or suspected damage to your customer’s property, contact or make reasonable efforts to contact the tenants of each affected unit, keeping a record of your efforts. Once this is accomplished, contact my insurance agent. Your insurance company needs to review the loss and damage to determine whether a covered loss has occurred that will indemnify you and provide defense coverage under their policy if necessary.
Finally, as much of the country has become painfully aware in the last few years, particularly inclement years, flood damage is typically excluded from all standard insurance policies. Flood coverage may be purchased separately from a specialty insurance market or the National Flood Insurance Program. If your facility is in an area that has or may experience flooding, this should be an important consideration.
Sedlacek: Fires, roof leaks and floods are dramatic events that have the potential to cause catastrophic damage to a self-storage facility. The initial action is going to depend on the individual scenario. In the case of a fire, call the fire department immediately. For roof leaks caused by severe weather, wait for the storm to clear first for your safety. With a flood, undoubtedly you will have to wait for the water to recede.