By Kay Schaefer
All smart self-storage owners know they need insurance to limit their business risk. You purchase a package policy to protect against facility damage, theft, tenant claims, injuries or other losses that may occur at your site. But do you know what to do when you need to report an incident and make a claim under your insurance? Do you know what the policy requirements are to make a claim?
Let’s review what your policy requires from you, the policy holder, including information you’ll need to provide to the insurance company. We’ll also discuss how you can maximize your insurance benefits and ensure the claims process goes smoothly.
Know What’s Covered
A review of your insurance policy will tell you what’s covered, the limits available to protect your business, and what your deductible will be if one applies. This should be done before the claim occurs. It’s best to do this at least annually when you renew your policy. Your insurance agent can help you with this analysis of coverages and deductibles.
When you do this review, identify your exposures and risks and consider the coverage offered, not just the premiums. You don’t want to find out later that you have exposures for which you thought you had protection. Some may be missing from your policy or specifically excluded from coverage.
The Claim Process
Your insurance policy is a contract between you and the insurance carrier. Along with details about coverage and limits, it’ll contain a section outlining your requirements for filing a claim. The policy will require you to notify the insurance company of the loss as soon as possible. While this sounds straightforward, there may be times when you aren’t sure if you should make a claim. There may be events (potential liability exposures) that you’re not sure will amount to anything but could become a problem in the future.
The best action you can take in these situations is to call and discuss the occurrence with your insurance agent. He’ll be able to guide you in determining whether the event is covered and should be reported to the insurance carrier. He may even decide to report it himself. At this point, a claim notice could be created, but no further action will be taken unless something else on your end triggers a claim. This notice to the insurance carrier will protect your rights under your policy and meet the time requirements for filing.
Don’t hesitate to file a claim because you’re concerned about the effect it could have on your future coverage or premiums. That’s why you have insurance in the first place! The most important aspect of your policy is how it’ll respond when you need it. If events aren’t reported in a timely fashion, you could be in breach of certain policy provisions and, consequently, jeopardize your protection.
Once a claim has been made, you’ll be required to provide additional information and cooperate in the investigation. You may need to give a sworn statement about the claim. Be prepared to provide details about the incident, including who or what was involved, what happened, and where and when the incident occurred. Write everything down before calling your agent. Include any available information on how to contact the involved parties and any witnesses (names, addresses and phone numbers). Good documentation goes a long way in simplifying the claim process.
There are many situations that could cause you to file an insurance claim on behalf of your self-storage facility. Some are related to your physical property and others can stem from the operation of your business. For example, you may experience a fire, roof leak or other incident. Let’s review the types of information you’ll need to present for some of these occurrences. The documentation needed by your insurance carrier will likely include some or all of the following:
- A list of all items that have been damaged or stolen. Consider keeping an inventory on hand or a photo record of what’s in your office, manager’s apartment and maintenance shed.
- A police report. You’ll need to file a police report in the case of theft, vandalism or, in some instances, an accident or injury. Keep a copy of the report for yourself and your insurance carrier.
- Photos. They say a picture is worth a thousand words, and it’s true. Photos can help you document what’s been damaged or destroyed and can serve as a refresher for you of what you had before the loss. Pictures should also be taken before you start the cleanup process to identify any property damage.
- Rent and income records. If your claim includes loss of rent, you’ll need historical records to demonstrate your loss of income. Your facility may experience higher rents during certain times of the year, so it may even be necessary to look at records from prior years to identify your loss if it occurs during a peak rental period.
- For liability claims, you’ll need some of the same items listed above, including any police reports and photos.
- For any incident involving an injury, you’ll want to provide the date, time, location, people involved and a description of the incident. Record these details as soon after the event as possible. If there are witnesses, get their names and contact information.
- If a tenant files a claim against you for damage to stored goods because he failed to purchase tenant insurance or protection, you’ll want to provide many of the same information as outlined above as well as a copy of the tenant’s lease and any addendums. Your insurance carrier will respond based on this evidence.
- A tenant may also make a claim against you for liability after a lien sale. Along with a copy of the tenant’s lease, you’ll need to provide all documentation, correspondence and notices provided to the renter prior to the sale. Even if you made a mistake, your sale-and-disposal liability coverage will defend and protect you up to the limit on your policy.
The Next Steps
In all situations, your insurance carrier should contact you and provide details on what it may need to handle your claim. An adjuster may come to your facility to inspect the damage, take statements, gather information and work with you to settle the claim. If you have a property claim, repair estimates may be needed. In fact, you may be asked to obtain an estimate or two, depending on the extent of the damage. Working closely with your carrier and adjuster will help your claim get approved and the check in the mail to you quickly.
Keep records of any costs you incur around the claim. Invoices for repairs, money spent on additional expenses to protect your property and reduce the claim will all be considered for payment under your policy limits. Make copies of everything before you send them to your insurance carrier. This will ease discussions and help you avoid conflicts.
Whether filing a property or liability claim, it’s in your best interest to do anything reasonable to prevent another incident. In fact, most insurance policies include a section addressing your duties after a loss and will state that you need to protect your property from further loss. This could include making temporary repairs or securing the loss location. You can always ask your insurance carrier about what’s reasonable.
Of course, you want to do everything possible to prevent a loss from happening, but knowing how to handle things will keep the claim process moving forward. By knowing what to expect from your insurance carrier and what’s expected of you in return, you’ll be prepared to handle the unthinkable if it occurs.
Kay Schaefer is the senior underwriter for Deans & Homer, an insurance managing underwriter that has provided specialized coverage for the self-storage industry since 1974. She has more than 30 years of experience in writing unique insurance coverage. For more information, call 800.847.9999; visit www.deanshomer.com.