There are a handful of ways a self-storage owner can go about purchasing insurance coverage. One is to shop online. Though the internet is an amazing tool for gathering information, it doesn’t make you an instant expert. Some kind of professional consultation is still usually required before you can make educated decisions.
Another way to source coverage is to seek out the help of a broker, which can turn into a kind of “warfare” wherein multiple parties shop the insurance marketplace on your behalf, hoping to win your business. The problem is the market is often limited, and most of the brokers have access to the same carriers and pricing. Under those circumstances, what criteria can you use to differentiate between the options?
Then there’s the request-for-proposal method, which is more or less like a beauty contest. You’ll screen and evaluate potential brokers based on various criteria. The goal will be to determine their level of expertise and various offerings, including any capabilities that’ll allow them to lower costs and provide value. However, this can be difficult process because, in truth, most brokers are highly efficient and competent.
While any of these avenues can yield a satisfactory result, I’d like to recommend eight key areas to examine when choosing an insurance partner. By keeping these considerations in mind, you’ll gather all the information you need to make a smart decision for your self-storage operation.
Every self-storage owner wants to pay a fair price for their insurance coverage. When reviewing your current situation or speaking with a potential partner, consider what specific strategies can be provided to help you squeeze the most out of your budget. If you already have a broker, how are your current strategies working?
If you already have a broker, think about the conversations you have with them about your business risk. What are they like? For example, when you review the marketing file from an underwriter, do you notice any discrepancies? In addition, what types of credits are you receiving? These are items that should be examined.
To help determine your overall level of customer-service satisfaction, consider how you hold your self-storage insurance broker accountable. For example, is there a service agreement in place, or do you need one? Do you receive an annual stewardship report as well as what you paid your broker the previous year, including contingency fees?
The risk-management resources your self-storage insurance broker offers and the ways in which they’re applied can directly impact your insurance premiums. Claims, administrative time, employee training, down time, analytics, compliance with the Americans With Disabilities Act and the Occupational Safety and Health Administration, etc., are all items that contribute to your operation’s total cost of risk. Do you have a full-time risk manager? How are your broker’s risk-management resources performing for you? What’s your return on investment?
Unless your self-storage business is a startup, you have an incumbent insurance-broker relationship to consider. If you’re contemplating a switch, think about what frustrates you when working with a partner. Similarly, what does a perfect business relationship look like to you?
There are a few reasons why insurance agent might be late in delivering your annual policy renewal to you. It usually has nothing to do with lazy underwriters or a late submission process. The main reason is usually that the incumbent agent is afraid that if they put an early renewal in your hands, it’ll allow you to seek alternatives from other brokers.
Price can often be the driving factor to make a switch if no relationship or additional value has been established with the broker. Consider what your renewal process looks like and if it’s acceptable to you. For example, are all of your self-storage policy effective dates concurrent, so you only have to concentrate on insurance once per year?
Filing claims is the one area that directly proves an insurance broker’s promise. Most self-storage owners want only two answers: How much money am I going to get, and when will the check be in my hands? It’s the broker’s job to clearly communicate the process and confirm client interaction with the adjuster.
If your self-storage company has been in business for a while, reflect on your claims experience over the last five years. If you’ve had claims, is there a frequency or severity issue? Has your broker offered any suggestions on how to prevent claims?
There are dozens of ways to trim costs by cutting insurance coverage, just as there are multiple ways to endorse or add coverage. Every self-storage owner has a different appetite for risk that must be considered and discussed with their broker or a prospective insurance partner.
When evaluating insurance brokers, consider the strategies they offer that impact your coverage. Ultimately, you have to determine how these work for you, if you’re comfortable with them and if there are any gaps you wish to shore up. A good broker will focus on making you whole in the event of loss and helping you understand your risk and coverage.
Regular and constant communication from your insurance broker is important for relationship development. When speaking with potential candidates, think about how you want to be communicated with in terms of format (email, phone, text, etc.) and frequency. What’s the longest time you’ll wait for a response before you begin to feel ignored or neglected?
Transparency builds trust. Most quality insurance brokers aren’t just salespeople trying to sell a product for the commission. They’re purveyors of resources and information that help self-storage owners make important business decisions. When you filter those decisions through these eight key areas, you’ll be on your way to developing a deeper comfort level and relationship with your insurance partner.
Paul Donovan is president of Donovan Insurance Solutions, a Tarpon Springs, Florida-based brokerage that works with commercial and residential clients. He began his career in insurance and risk-management services in 1985. He strives to build relationships based on trust, working with each client to assess and solve their individual needs. To reach him, call 727.935.4858.