Lessen the Impact of Self-Storage Property Damage With These Smart Strategies

Every self-storage facility is susceptible to property damage. It can be caused by weather events, tenants, visitors, criminals and even your own staff. Following are examples of incidents that could happen at your site and ways to prevent them. You’ll also get advice on how to respond if an accident does occur.

Brian Bogdanoff, Director of Property and Casualty Insurance

June 8, 2024

6 Min Read

Summer is just around the corner, and it’s a notoriously busy time for self-storage operators as their customers relocate, embark on home projects and travel for recreation. More business is good news, however, the increase in foot and vehicle traffic also means greater risk of property damage, which can be a significant cause of loss. Let’s not forget the impact of excessive heat and humidity, which can bring pests, mold and mildew, plus the seasonal increase in natural disasters including hurricanes, wildfires, tornadoes and floods.

Any of this can lead to operational disruption, unexpected expense, upset customers and staff, and harm to your business reputation. For this reason, it’s wise to have a risk-management plan in place. Let’s look at some scenarios you may find yourself facing and how to prevent them, plus how to respond appropriately when property damage does occur, either at the hands of Man or Mother Nature.

Types of Damage

Even if you believe that you run a tight ship and do everything possible to mitigate risk, accidents happen, and no one controls Mother Nature. That said, there are a few damage-inducing incidents that are common in the self-storage industry.

For example, tenants are often unfamiliar or uncomfortable with driving a moving truck. They might easily back into or clip one of your buildings, damaging wall panels, doors, gutters and more. Installing concrete bollards can help protect your structures. It also helps to plan for wide drive aisles and turning spots during the layout phase.

Fire is another common cause of self-storage damage. Even though your rental agreement forbids tenants from keeping hazardous materials in their units, they will intentionally or unknowingly store batteries, oil, gasoline, paint and other flammable items. We’ve also seen tenants illegally use facility outlets to power fans, lights and space heaters inside their space. Any of these might lead to combustion under the right circumstances, and a fire can be devastating, creating significant business disruption and expense. It can take several months to clean up debris, get official inspections and permits, order materials, and line up contractors for rebuilding.

There are many other types of damage your self-storage facility might suffer. Here are a few that have been seen in this industry:

  • A car swerves off the road and drives into a self-storage office or unit.

  • High wind from a hurricane or tornado tears the roof off of a building, or completely decimates the structure.

  • Flooding damages several units and the contents stored within.

  • A branch falls onto a roof, causing destruction and creating leaks.

  • Excessive heat or moisture creates mold inside units.

  • A thief cuts into unit doors or walls to retrieve items.

  • A tenant attempts to “customize” their unit, drilling holes or driving nails into the walls. (In a recent story, a customer mounted a solar panel onto the facility roof to power a trickle charger for the motorcycle they were storing.)

Mitigation Tactics

To protect your self-storage business from property damage, consider the following strategies.

Site maintenance. It’s critical to perform routine facility upkeep that encompasses your roof, doors, flooring, windows, sidewalks, driveways, parking lot, security system and other key components. This topic could fill an entire article, but here are a few essential tips to help you start building a checklist:

  • Conduct daily property walk-throughs to look for potential hazards.

  • Regularly examine your roof and have it repaired as necessary.

  • Keep the property clear of debris, and carefully maintain trees and shrubs.

  • Keep your floors clean and dry, and post signs when surfaces are wet or potentially slippery.

  • Have your HVAC and electrical systems regularly checked and repaired by a licensed technician.

  • Get your fire extinguishers recharged and tested each year.

  • Reinforce your buildings, doors and windows to minimize damage in the event of heavy wind or flooding.

  • If you have a backup generator, have it serviced annually. If  you don’t, consider installing one to ensure continued business operation in the event of a security breach or power outage.

  • Schedule regular inspections of your property’s key components and systems. This not only ensures safety, it can be helpful when it comes time to renew your insurance policy each year.

Emergency plan. Develop comprehensive protocols for communication, coordination with emergency services and evacuation if necessary in the event of a crisis, then regularly review and update it to ensure effectiveness. It’s important to establish clear communication channels with tenants, staff, vendors and other partners to provide timely updates on facility status and any necessary actions they should take. Use email, text messages and automated phone calls to ensure wide reach and timely receipt.

Rental agreement. Make sure each tenant has signed a lease and that your rental agreement is up to date. It should include verbiage that states the following or something similar: “Tenant acknowledges that owner doesn’t carry any insurance which, in any way, covers any loss whatsoever that tenant may have or claim by renting the storage unit. All property stored in the storage unit shall be at tenant’s sole risk.”

Insurance. Review and secure comprehensive coverage that encompasses fire, wind, hurricane and water damage. In addition, offer a tenant-insurance program. Your renters many haver their own homeowners or renters insurance coverage, but encourage them to purchase additional protection for their stored belongings. Regularly review and adjust the coverage limits in these policies to reflect changes in tenant needs and property value.

If an Incident Occurs

If you experience property damage at your self-storage site, first confirm whether anyone requires medical assistance. If so, call 911. Personal injury is another important topic that could fill an entire article, but the important thing is to ensure these needs are addressed promptly and competently.

Next, capture specifics of the event via photos and video and fill out an incident report, which provides a summary of the loss, contact information for any witnesses, and other pertinent details. Once you’ve gathered all this information, submit it in a timely manner to your insurance agent. Keep this documentation on file for at least five years and make sure it’s accessible by computer.

While you work with the insurance company, do everything possible to prevent further damage or injury. Some initial clean-up and repair may be necessary. If so, save all receipts for this work. You might not be reimbursed for all expenses, however, any failure to appropriately maintain the premises may reduce or void your insurance coverage, so it’s important to act.

Next, start getting estimates for permanent replacements or repairs. However, if you plan to submit them as part of your claim, don’t commission any work until you get approval on the scope of work from your insurance company. Your policy might contain certain limitations and exclusions and may not cover everything you’d expect, so it’s important to review your coverage with an agent who’s experienced and knowledgeable in self-storage.

In fact, you should be reviewing your insurance policy annually. The good news is there are national programs that carry unique coverages designed specifically for our industry. Make sure you get the protection that fits your needs and budget.

With a self-storage business, there’s always a chance that you’ll experience property damage of some kind, whether caused by nature or humans. Being prepared will give you peace of mind and confidence that your facility can remain operational. Timely action and meticulous planning are key to shielding your asset and minimizing the potential damage and loss during unpredictable events.

Brian Bogdanoff is the director of property and casualty insurance for Storable, which provides self-storage insurance coverage in all 50 states. In addition to insurance, Storable offers a comprehensive suite of intuitive products that work together to increase business efficiency and profitability. For more information, call 888.525.1760 or email [email protected].

About the Author(s)

Brian Bogdanoff

Director of Property and Casualty Insurance, Storable

Brian Bogdanoff is the director of property and casualty insurance for Storable, which provides self-storage insurance coverage in all 50 states. In addition to insurance, Storable offers a comprehensive suite of intuitive products that work together to increase business efficiency and profitability. For more information, call 888.525.1760 or email [email protected].

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