Whether it’s during a casual conversation on a flight or over cocktails at a dinner party, people often ask me, “What do you do for a living?” When they hear “insurance,” they initially think it sounds boring; but when I mention “self-storage,” their eyes open wide and their ears perk up. The reactions are consistently positive, and they often tell me they wish they’d purchased a facility way back when. They also usually comment on the reality TV show “Storage Wars” and joke about how auction winners find gold coins and valuable antiques in units. If they only knew what we know!

Indeed, the self-storage business is thriving and, by all indications, ready-made for the lifestyle and workplace changes millions of people are experiencing these days. However, great reward comes with unique challenges. To continue our ongoing success, we must be prepared to face a range of trials. This includes purchasing solid insurance protection for whatever the world throws at us.

Below I’m going to share several self-storage insurance claims that seem implausible but actually occurred. They’re excellent examples on why facility operators need a comprehensive policy to protect their business.

A Crazy Ride

Let’s take the case of a driver under the influence who crashed his car late one night into a San Diego self-storage facility. He plowed through the cinderblock barrier wall and proceeded to run through three non-combustible units. This well-built property suffered major damage, not only from the crash but when the vehicle caught fire and destroyed surrounding buildings. Surprisingly, the driver suffered next to no injury, and no one else was on site at the time.

The insurance agent who wrote the policy for this group was enjoying their morning coffee when they received the news. They quickly realized their client’s business had suffered a major loss. The claim paid out hundreds of thousands of dollars. Because the driver was uninsured, there was little to no chance of subrogation. While the situation sounds bad, it could’ve been much worse if the driver or anyone else had been hurt.

The Self-Taught Exterminator

Whether we like to admit it, the truth is we don’t always know what’s being stored in our self-storage units. We have a saying here at my company: There’s no insurance exclusion against stupidity. You might think that sounds a little harsh until you read what happened at a Texas self-storage facility.

A long-time tenant was visiting their unit and saw a “huge” cockroach. I’m no fan of these pests, but the way this person decided to dispose of it is quite a story. Against all common sense, they set the bug on fire using a blowtorch. That’s right, a blowtorch! Why they didn’t simply step on it or alert management is anyone’s guess.

This absurd mistake caused more than $350,000 in property damage, as the building caught fire. This was a tenant who had no assets, so subrogation was impossible. We’re often asked why insurance premiums go up after a claim that wasn’t the self-storage owner’s fault. The fact is, whether or not the incident was your fault, your insurance company paid out tens or even hundreds of thousands of dollars.

Nothing to Coo About

New York City is famous for many things, including the thousands of pigeons that rest on its notable statues and buildings. These birds became a real problem for one self-storage owner when hundreds of them decided to take up residence at their facility and nest in dozens of units.

Thankfully, this property had the best kind of tenants—the ones that only show up once a year and pay every rent increase without complaint. But one day, a customer came in to discover their unit covered in layers of pigeon poop. It was everywhere! This may be news to you, but the Environmental Protection Agency and other organizations classify pigeon excrement as a pollutant. Want to know what’s excluded from your standard business-owner insurance policy? That’s right, pollution.

In this case, the storage owner was fortunate enough to have an additional pollution-liability policy. They used their carrier’s 24-7 hotlink to help remedy the situation and, thankfully, the claim cost less than anticipated, as most of the waste was on the building rather than the tenant’s belongings. Still, this was a $20,000 claim and could’ve been even more if the pigeons had nested in slightly different areas.

Headed for a Fall

Betty Lou was supposedly running late for something “very important” when she visited her self-storage unit, but she needed to talk to the manager. She rushed into the office, and even though it was a clear, dry day, she tripped over the welcome mat and severely injured herself.

As she lay on the ground, Betty Lou openly admitted it was her own fault and that she tripped because she was hurrying. The facility owner, who happened to be on site that day, called for an ambulance and stayed with her until it arrived. He actually knew Betty Lou from church and even gave her his cell-phone number, as he was genuinely concerned about her condition.

Betty Lou decided to take legal action, even after admitting fault. She was awarded $150,000. Moreover, the owner’s legal defense cost tens of thousands of dollars. I’m not usually a fan of the saying, “No good deed goes unpunished,” however, this claim gave me second thoughts.

All these real-life insurance claims demonstrate that things are often out of your control at your self-storage operation, even when you do everything right. This is why it’s important to have a specialty insurance broker walk you through often-unforeseen scenarios to ensure your business is protected.

Jenny Bortman is vice president at Universal Insurance Programs, which has created and provided specialized insurance coverages to the self-storage industry for more than 20 years. For more information, call 602.222.8300 or email [email protected].