Billion-Dollar Fire Losses Underline The Importance Of Fire Prevention
Insured property losses as a result of the devastating Camp Fire reached $8.4 billion at the end of January 2019, and the California Department of Insurance expects that number to rise. The deadliest wildfire in the state’s history represents the largest portion of California’s estimated $12.4 billion total wildfire claims for last year.
Wildfire and fire caused by other sources is a serious concern for self-storage businesses across the country and one of the costliest causes of loss for property owners and insurance carriers. In addition to the cost of repairs and loss of business income while spaces are unavailable to rent, the toll a fire can take on an operation can be devastating. The sight of a damaged, burned-out building can make it difficult to rent units to prospective customers, and customer retention could be impacted negatively. It is critical that business owners take action to mitigate the potential risk of fire on their properties.
Identifying Fire Risks
The nature of self-storage means that, for the most part, facility employees do not know what customers are storing within their units. This reality underscores the importance of the rental lease, which should include specific wording prohibiting the storage of flammable materials and certain hazardous activity. However, the wording of the lease has little value unless the manager points out the prohibitions and communicates them directly to the tenant at the time of lease. The business owner also may wish to require that tenants provide evidence of insurance such as a homeowner, renter, or property storage insurance policy or a general liability policy for commercial tenants.
Communicating With Tenants
Ongoing tenant education is a top priority when it comes to fire prevention at a self-storage facility, and regular communication to customers can go a long way toward mitigating the risk of fire on the property. Examples of tenant communication include the following:
- Signage – Post “no smoking” signs throughout the facility as well as signs reminding tenants that the use of candles or other open flame is prohibited on the property.
- Bill Reminders – Include brief educational messages and safety tips in bill reminders (mail and email) such as a list of items that are prohibited from being stored (gasoline, paint thinner and propane) and reminders to drain fuel from lawn mowers, chain saws, gas generators, lanterns, and heaters prior to storage.
- Hazard Reporting Hotline – Communicate to tenants that their safety is the facility’s priority and their help is needed to keep the facility safe and secure. Encourage them to report safety hazards to the facility via a hotline telephone number and/or dedicated email address. Whenever a tenant makes a report, be sure to follow up to thank them and let them know that the issue is being addressed.
Critical Role of Facility Managers
While it is certainly beneficial to recruit tenants to help identify safety concerns, facility managers are always the first line of defense. They need to be trained and held accountable to be out on the premises on a regular basis. Lease violators should be communicated with on an expedient basis and advised to terminate the activity or remove hazardous material from the premises immediately. Managers also should be aware that frequent visits to a unit by a tenant is a good reason to make a courtesy call to the unit while the tenant is on site to observe activity and unit contents.
When meeting with your self-storage clients, be sure to review insurance options to help protect their valuable investment including a discussion of limits for property and liability coverages to include business interruption and umbrella to ensure that exposures from fire have been properly addressed.
President and CEO