March 1, 1998

9 Min Read


An Interview With Randy Tipton

Randy J. Tipton is vice president ofstrategic planning for the Universal Insurance Facilities Ltd.,making her the person most responsible for setting the directionand focus of the company's insurance programs. Ms. Tiptonformerly served as vice president of MiniCo. Inc., where she wasresponsible for overseeing all insurance operations. With morethan 20 years of underwriting, marketing and managementexperience to call upon, she has acquired an unsurpassedcombination of skills and industry knowledge that has set thestage for new opportunities to better serve Universal'scustomers.

In 1994, Universal Insurance Facilities Ltd. surprised theself-storage industry with the introduction of itsground-breaking Self-Storage Insurance Program. At the time,facility owners were in need of another specialized businessinsurance policy geared to protect them from the risks inherentin running a self-storage operation. Universal's program, whichprovides property and liability coverages self-storage ownersneed in a single, affordable package, has been an unqualifiedsuccess, and has served as a blueprint for many of the company'ssubsequent insurance offerings. We recently spoke with RandyTipton about the company's program and its plans for the future.

How did you wind up in the self-storage insuranceindustry?

Interesting question. In the 1980s, I worked for 10 years atone of the nation's largest insurance companies. During thistime, my responsibilities were continually evolving, and I foundthat I was having less and less personal contact with ourinsureds, which was the aspect of my job that I most enjoyed. Ifinally decided that it was time to leave the corporateenvironment and get back to my agency roots. And it was alsoaround this time--I think the year was 1989--that I graduallystarted to become aware of the self-storage industry's need for ahigher level of insurance expertise than it was currentlygetting. So that's where I decided to focus my attention. And therest is, as they say, history.

So you're saying that the need for customercontact is important to you?

Absolutely. Working directly with our insureds is what I enjoymost. It really is the best part of my day.

How has the industry changed since you firstentered into it?

Oh, the industry has changed in so many ways over the past 10years--facilities are built so much better today, and facilityowners have become much more sophisticated than in the old days.And there's been such a big change in the financial world as itrelates to the self-storage industry. Remember, back in 1990,most lending institutions were far more reluctant to loan moneyto facility owners than they are today. Back then, the typicalfacility owner had one or two properties--they were basicallymom-and-pop operations. But the advent of alternative financingand the "PacMan" mindset by large corporations toacquire more and more self-storage properties quickly changed allthat. Today, even the smallest properties utilize sophisticatedcomputerized accounting methods, are constructed much better,implement electronic security safeguards and, in general, have amuch more professional outlook than they did in the beginning.

Are self-storage owners/operators becoming moreknowledgeable about their insurance needs?

Yes, I think that most of them are, thanks to industrypublications like Inside Self-Storage. I don't want thisto sound self-serving, but our staff gets dozens of calls eachmonth from facility owners who read "Insurance Corner"and have follow-up questions and concerns on the topics we cover.For example, a while back we ran a two-part article on "saleand disposal legal liability" that generated a tremendousresponse from new and prospective facility owners. I mean, thesepeople are extremely well informed and looking for very specificanswers to some very in-depth questions. And we're getting moreand more general inquiries from prospective facility owners whohave made a point of seeking out a specialty agency to meet theirneeds. Of course there are industry trade shows and seminars thathelp educate facility owners about insurance, as well asspecialty agents that are always available to answer theirspecific questions. So yes, I think it's obvious that facilityowners are becoming quite knowledgeable about their insuranceneeds.

What are self-storage owners' biggest fears interms of protecting themselves against potential disasters?

Well, coastal property owners are certainly concerned abouthurricane and wind damage, and of course Texas facility ownersworry about damage caused by hail. And I guess most everyone isconcerned about liability in general--in other words, yourtypical business liability as well as liability to cover theexposures that are unique to the self-storage industry. If I hadto name the single greatest fear of all, though, it would be thefear that your property is not properly protected--wondering ifyou had the right coverage for your needs, if it is sufficient tocover any losses you sustain to get your doors open again in theevent of disaster. That is, after all, what insurance is reallyall about--financial security and peace of mind.

At what point in the development-to-grand-openingprocess should an owner determine his insurance needs and settleupon an agent?

We're seeing a large percentage of facility owners gettinginvolved in the very earliest phases of the development process,since careful planning can save them a lot of money down theroad. The really savvy ones run dozens of possible locations,construction methods and security systems past us to see whichcombination offers the greatest amount of present and futuresavings. This kind of planning benefits us as well as thefacility owner, since we can help advise him or her on how toimplement measures that can help avoid losses and reduceinsurance premiums in the first place.

Is there a wide variety of policies and diversityof costs? How does a facility owner decide that he's getting thebest form of insurance for the best price?

With regard to policies, each will have some similarities toothers as well as differences, which will of course affect costs.That's why it makes sense to work with a specialty agency. Forexample, we can run a coverage comparison for a customer thatwill quickly show him how his policy stacks up against ours. Andsince we specialize in insuring self-storage facilities, we'reaware of what kinds of discounts are available for facilityowners and can advise them on what kinds of steps they can taketo minimize claims. As far as how a facility owner can decide ifhe or she is getting the best insurance for the best price, theanswer comes down to trust. If a facility operator feels securein their dealings with a specialty agent--someone focused on hisindustry who knows what his client's unique exposures are and howto get them the protection they need--they should feel confidentthat their insurance needs are being adequately met.

Can you tell us a little bit about how yourprogram got started?

Our goal from the very beginning was to make it easy forself-storage owners to insure their facilities by offering acomprehensive yet affordable insurance package. One of the mostdifficult jobs facing every self-storage owner has always beenthe need to secure adequate insurance coverage. Besidesprotecting your buildings and equipment against fire, wind andvandalism, you also need to insure the safety of your tenants'property. Plus, you need to protect yourself against liabilitysuits filed by tenants injured while on your premises, andtenants' property damage lawsuits. You also need to protect yourincome against any business interruptions that occur after aloss. Our program makes it easy for facility operators to get acomplete, current and comprehensive insurance coverage.

There's been a lot of interest in Universal'sprogram--not only by self-storage owners, but by competingagencies. What is it about your program that has so captured thecompetition's attention?

I can think of several reasons. First of all, our program hasfilled a significant void in the marketplace. Our specializedindustry focus and strategic direction have certainly beenadvantages. But if I were to name just one reason for oursuccess, I would have to say that it has been the quality of ourstaff. Their experience and professionalism have given us an edgein service and responsiveness that our customers reallyappreciate. Our coverages and rates are outstanding, but ourservice has gotten us where we are today.

So your agents are self-storagespecialists?

All of our agents and underwriters are extremely knowledgeableabout the self-storage industry. Each of them can speak candidlyabout real-life insurance requirements and advise self-storageowners on how their interests can best be served. Plus, if youare on a limited budget, our agents will analyze your needs andhelp you invest your insurance dollars where they will do themost good.

What size self-storage operations do you typicallyinsure?

Every size imaginable. We have customers from all across thenation, ranging from 50- to 60-unit operations to majorfranchises with thousands of units spread over a hundredlocations. But no matter how large or small any of our customer'sfacilities may be, I've found that they are all serious businessowners who are very serious about insuring their success, andhave invested in quality coverage to protect their financialfutures.

What's the most frustrating problem you've come upagainst?

There is one problem that is personally very frustrating forme that has to do with comparing costs when a self-storage ownerrequests an insurance quote. Our program is underwritten byRanger Insurance, which is a commercial property and casualtycompany specializing in insuring selected business operations;the company writes more than $200 million in premium in 14specialized markets in 50 states. Ranger has earned one of thehighest possible rating from A.M. Best, the leading insurancerating service. Yet, despite the huge dollar amounts tied up intheir operations, some self-storage owners try to save a fewdollars on their annual premium by insuring with a company thathas a "so-so" rating, or cut back on coverages for ashort-term savings. It can be very difficult to sell quality, butin the event of a claim, our customers are very glad that theirpolicies are underwritten by Ranger.

Do you offer any discounts or incentives for yourcustomers?

We can offer discounts to members of the Self StorageAssociation, and our agents also can provide premium credits tofacilities on a case-by-case basis, according to the kind ofsecurity system they have in place, if they have a manageron-site, and so on.

Depending on location, the self-storage industrycan be very seasonal. How does this affect your business?

Well, we are able to offer financing on all qualifiedpremiums. This allows our customers to spread their payments overthe course of the policy year to suit their cash flow.

What do you see in the future for Universal?

Obviously, to keep growing, in order to fulfill our commitmentto our customers for better service, better coverages and betterrates. We've invested heavily in the past year in automation,tripled our staff and moved to a new, larger office location, allto better serve the needs of our insureds. And we're alwayslooking at new technologies to improve our effectiveness. Forexample, we now have the capability to provide instant quotes ondifferent coverages, and have established a Web site on theInternet that has proved very popular with self-storage owners.

What do you see in the future for the self-storageindustry?

The self-storage industry has achieved considerable growthover the past several years and is currently in a very stable andprofit-generating phase. Occupancies are on the rise and rentalrates are rising with them. Consumers are leasing units forlonger periods of time and moving to larger units, and more andmore self-storage facilities are being built to take advantage ofnew opportunities. The future of the self-storage industrydefinitely looks bright.

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