Natural disasters accounted for $92 billion in property damage across the United States in 2021, according to the Insurance Information Institute. While tropical cyclones accounted for 42% of total insured losses, severe convective storms comprised 29%. Other notable perils included winter storms, wildfires and flooding.

The reason property damage is a primary component of business-insurance coverage is because it ensures self-storage operators can resume normal operation through proper financial indemnification after suffering a loss. Though some preventive measures can minimize loss, some form of harm is inevitable when a facility is exposed to inclement weather. Let’s examine the types of risk you’re likely to face in this industry and what you can do to mitigate it.

Types of Damage

Storms are a primary cause of loss at residential and commercial properties. For example, wind and hailstorm damage is a common peril that affects roofs, which vary in durability and cost, depending on the design and materials. Metal roofs, which are common at self-storage facilities, are the most resilient to age, wear, tear and inclement weather, while flat roof tops typically have a membrane-type covering such as TPO (Thermoplastic Olefin or Polyolefin) or ballast. Metal is the most durable yet comes at a higher cost to install and replace.

Rainfall and flooding can cause significant damage to interior building components. Worn out roofs allow heavy rain to penetrate structures, thereby destroying customer and business property. Flooding can be a particular problem in coastal areas.

Tornado activity is another devastating cause of property damage. While it’s generally isolated to certain geographic regions, the level of catastrophe accounts for a significant portion of insurance claims.

Wildfires are similar because they also tend to occur in specific areas, particularly the western United States. States subjected to drought have ripe conditions for wildfires, which can ravage thousands of acres and easily consume structures.

Another notable cause of property damage and liability exposure is a structure fire, which can occur in self-storage when tenants store hazardous materials in their units or engage in dangerous behavior involving flammable items. Sometimes they’re attempting to live in the space. Fires result in high claim severity. Slip-and-fall accidents can also occur at storage facilities, along with property damage from vandalism, theft and malicious mischief.

Preventive Measures

Roof maintenance is a necessary part of self-storage damage prevention. Regular inspections (and repair, when needed) are critical to prolonging roof life. Facility operators should schedule a yearly evaluation to ensure their roof materials are intact and functioning as intended. Every roof type, including metal, requires periodic maintenance. Be sure any failure points are addressed by a licensed professional.

Here are a few other prevention tips:

Security features can aid in deterring theft, vandalism or malicious mischief. Facility managers should conduct periodic walk-throughs and note any non-storage-related activity or evidence of tenant residency. Monitoring gate access and strategically placing surveillance cameras around the property can mitigate potential break-ins. Central alarms with fire and smoke detection can reduce response times from emergency services.

What to Do If an Incident Occurs

If your self-storage property sustains damage, your primary course of action should be to limit its effects as safely as possible. As the insured, you have an obligation to protect the business from further loss. In the event of water or fire damage, contact a mitigation specialist who can assist with separating spoiled from unspoiled property. These professionals can support a claim investigation with photos.

As best as possible, attempt to retain the source of the damage. Also, keep all related invoicing and documentation. Your self-storage operation should have a standardized incident-reporting procedure. This serves a vital purpose because it ensures details of any notable event are documented. These reports should include helpful information such as date of loss, location, a timeframe of events, policy information and points of contact. Video footage can be crucial for slip-and-fall occurrences as well as theft and vandalism claims.

When to File a Claim

Always notify your self-storage insurance carrier of any potential claims as soon as possible. It’s important to know the proper steps to filing before the need occurs. Be prepared by bookmarking your carrier’s online reporting page or having the phone number easily accessible.

Claims should be filed as soon as possible after mitigation efforts are complete. If in doubt, file a claim for investigation because delays in reporting can impact the outcome. Your chances improve greatly when insurance adjusters receive timely documentation, photos and a sequence of events.

In some instances, legal documentation can be time-sensitive and result in negative implications when not addressed or expedited. Legal activity is generally associated with liability claims.

Ensure You Have Adequate Coverage

Review your self-storage insurance coverages when first obtaining your policy as well as at the time for renewal. Consider any property improvements made or equipment purchased in the last year. Facility expansions are a common occurrence and one for which knowing the cost to replace is important. Adjust your property limits so you can meet your true replacement costs in the event of a major loss.

Regularly consider the potential perils your self-storage property may face. Are there any new ones? Are you in a geographic region where coastal wind is a primary concern or tornado activity is a threat? Understand your location, and recognize the types of incidents that may occur. This knowledge not only helps in selecting the proper insurance coverage, it’ll inform your choice of building materials for any upcoming projects.

Finally, review other facility features that can deter or mitigate risk, such as perimeter fencing and security cameras. Properly placed fire extinguishers can prevent fire spread. A multitude of options are available to facilitate loss prevention. Keep it simple and consistent.

Be Proactive

Damage to your self-storage facility can result in significant monetary loss and untimely business interruption regardless of the cause. Be proactive in identifying potential risks, and then take steps to prevent incidents. If one does occur, try to safely control the damage and file a claim quickly. Retain all applicable documentation to support the investigation process. Most of all, remember that proper maintenance is often your best prevention tool.

Louie Gonzalez is a service specialist with Universal Insurance Programs, which has created and provided specialized insurance coverages to the self-storage industry for more than 20 years. His primary role is facilitating claims between clients, carriers, adjusters and underwriters. He previously spent 14 years as an adjuster for legacy carriers, working with first-party property damage and bodily injury/liability claims. To reach him, call 480.885.2607; email [email protected].