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Self-Storage Damage Control: Understanding Property and Liability Loss and How to File an Insurance Claim

Every self-storage operation, no matter how well it is run or where it is located, will eventually experience a financial loss due to liability or property damage. This is why you have insurance; but how you prepare for and file your claim is critical. Let’s look at some common incidents and advice for how to proceed.

Louie Gonzalez

September 19, 2023

5 Min Read
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Eventually, every self-storage property will experience a financial loss due to liability or property damage. These incidents are never pleasant, but as a facility owner or manager, you should understand how these events occur and how to navigate them when they do.

Of course, your business should have insurance to protect you in these moments. Preparation is still key. You must have clear procedures in place for filing a claim with your carrier, through the proper channels. Prompt reporting initiates the investigation process and leads to better outcomes, while filing delays can exacerbate the severity of the loss.

Following are the common incidents that can occur at a self-storage property, followed by advice on how to proceed afterward and an overview of the claims process.

Types of Incidents

Between liability and property damage, the latter is more common in self-storage, but both can occur at any time; and they can be costly. Here are some examples of common incidents:

Natural disaster. Perilous weather- and element-related events can cause lots of physical damage at a storage property. The most frequent losses stem from wind, hail and fire. Geographic location typically dictates the amount of exposure, however, a fire can also result from explosions, lightning or tenant activity.

Collision. Property damage caused by vehicles has become more common in self-storage, often caused by errant drivers crashing into signs, buildings and gates. Sometimes a tailgater will clip the gate as they attempt follow another vehicle onto the site. Though these incidents may seem minor, they can cause significant structural and mechanical damage.

Acts of mischief. Malicious acts, including burglary and theft, are common causes of property loss at self-storage facilities.

Negligence. General-liability losses occur when a person sustains an injury or stored property is damaged due to business negligence, and both types of incidents can result in a lawsuit. Bodily injury can occur due to slips and falls on facility grounds, particularly when there’s ice or snow build-up or uneven terrain. Injuries can also be related to unit-door operation, especially if there are sharp edges.

Another form of negligence is when tenant goods are wrongfully sold at auction. This liability loss initiates a detailed investigation, which is necessary to settle warranted claims or defend against a lawsuit.

After the Incident

Your self-storage insurance policies are in place to address these types of events, but it’s best to file a claim with your provider as soon as possible upon discovery of the loss or damage, or any situation that may lead to it. Once the claim is filed,  an adjuster will be assigned to your case to coordinate an investigation.

Timely reporting won’t only mitigate the severity of the loss, it increases the accuracy of the research. That said, there are some things you need to take care of before reporting your claim to preserve the scene and evidence, which can help lessen further damage and aid in the investigation. Here are some specific steps to follow:

  • If a law may have been broken, notify the police.

  • Write a description of the incident, including the people and property involved and how, when and where the loss or damage occurred. You might take photos or video of the scene.

  • Take all reasonable steps to protect the property from further harm. If feasible, set the damaged goods aside and put them in the best possible order for examination.

  • Provide a complete inventory of damaged and undamaged property, including quantities, costs, values and the amount of loss claimed.

  • Keep a record of your expenses for emergency and temporary repairs to be considered in settlement of the claim. Just be aware that this will not increase the “limit of insurance” in your policy.

  • Permit the insurance carrier to inspect the property as well as to examine and make copies of your books and records. They should also be allowed to take samples of damaged and undamaged property for inspection, testing and analysis.

  • Finally, if you intend to continue your self-storage business, you must resume all or part of your operation as quickly as possible.

Filing Your Claim

All facility staff should be familiar with how to properly file a claim with your self-storage insurance carrier. Avoid delays by having all related information readily available and confirming the proper protocol with your broker, agent or carrier representative. Some policies include instructions on how to do this. If you’re unclear on how to proceed, just ask. In most instances, the notice of loss is first reported through your insurance provider’s website or via email, which allows documentation to be uploaded. A phone call is always an option, too.

To improve the speed and accuracy of any claim, create a standardized incident report and procedure for all team members to use. This should be simple to complete and allow you to promptly capture all relevant information to support an investigation. Following is a list of information to include. These elements will be required to generate a claim number.

  • Insured’s business name and contact information

  • Date and time of the incident

  • Full location address

  • Loss description, including photos, documentation and other supporting records

Depending on the incident, you might receive a summons and complaint (S&C). This is a formal, time-sensitive legal document advising a person or entity that a lawsuit has been filed against them. In this situation, your self-storage insurance adjuster will need to know who filed the S&C as well as how and when it was received (date and time). This is a critical step in the litigation process. Legal implications may result from any delays in reporting, so always provide a copy of the S&C to your carrier as quickly as possible.

Be Prepared

To be sure, unexpected events will occur at your self-storage facility. While losses can be mitigated, none are completely preventable. Therefore, knowing the proper method for filing an insurance claim is necessary.

In general, the procedure should be simple to execute and capture all relevant loss information. Remember, timely reporting will improve the claim-investigation process! Make sure all staff are familiar with the types of losses that can occur as well as how to complete an incident report.

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].

About the Author(s)

Louie Gonzalez

Service Specialist, Universal Insurance Programs

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].

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