Those who operate self-storage businesses in areas prone to hail storms are probably familiar with the damage they can inflict on a property and the resulting repairs and/or replacement of portions of the roof or the entire roof. Hail losses have been trending upward in severity and frequency over the past several years. Between 2000 and 2013, insurers in the United States paid nearly 9 million hail loss claims totaling over $54 billion. However, 70 percent of the losses occurred during the period from 2008 to 2013, and claim severity during the same period was 65 percent higher than that recorded between 2000 and 2007.
The Cost of Hail Damage
The pain felt by insurers has been passed on to property owners in the form of stricter underwriting guidelines, higher deductibles, increased premiums, endorsements limiting coverage, and carriers declining to quote wind/hail coverage. In the most challenging locations, wind/hail deductibles of up to five percent may be applied to property insurance policies, which can create a large financial exposure for the business owner in the event of a major loss. With that in mind, here are some recommendations to help protect a self-storage facility from the costly effects of hail damage.
- Insurance – Schedule a coverage review with your insurance agent being sure to address potential exposures caused by hail and wind. MiniCo offers a stand-alone wind/hail deductible buy-back policy that lets you lower the deductible to as little as one percent or a specific dollar value. Offered in partnership with Lloyd’s of London and available anytime during the policy term, MiniCo’s program lets you decrease your potential out-of-pocket financial exposure. For example, reducing the deductible from five percent to one percent on a property valued at $2 million would reduce the out-of-pocket exposure from $100,000 to $20,000 in the event of damage to all buildings on the property.
- Roof Inspections and Maintenance – Conduct regular inspections to evaluate the condition of the roof. Be sure to perform the necessary maintenance on any areas identified as defective during the inspection.
- Roofing Materials – During new construction or when reroofing, select materials that provide better hail protection such as ballasted membrane roofs and other impact-resistant coverings. Light metal roofs and smooth roof coverings, including single-ply and built-up coverings, are more susceptible to damage by large hail stones. A qualified roofer may also suggest the use of elastomeric coating, which, when properly applied, provides weatherproofing, ultraviolet resistance, and fire resistance.
- Protective Shields – Install protective shields or screens over skylights, HVAC units, and other roof-mounted equipment.
Risk Management Resources
There are many valuable resources for risk management information to help self-storage business owners minimize potential claims. Your insurance agent is an excellent source for risk management strategies. Liberty Mutual Insurance, one of MiniCo’s carriers, has prepared a detailed hail action plan that is available for download at www.minico.com/hailplan. Resources for business owners are also available at the Federal Emergency Management Agency (FEMA) website www.ready.gov.
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