Prepare for Turbulence
Historically speaking, the spring
and summer seasons represent
the highest occupancies for the
self-storage industry. It is a time of
transition for many tenants. Perhaps
they are downsizing and need
storage for the goods they do not
wish to part with or maybe they are
trying to sell a home and want to
remove clutter. Regardless of why,
this period of transition represents
a seasonal boom for our industry.
Mother Nature is also transitioning
from winter, with its cooler and more
stable atmospheric conditions, to a
warmer, more turbulent environment
which may create more intense
weather conditions. These conditions
tend to wreak havoc on your
portfolio during the very season you
should be recognizing your highest
revenue. Three major weatherrelated concerns during this period
of meteorological transition are:
flooding, tornadoes (wind)/hail, and
hurricanes. While flooding and wind/
hail can occur at any time during
the year they are most prevalent
during this period of transition.
This article will offer a high-level
conversation regarding these three
areas of concern. Comments made
about the availability of insurance
products are offered from a
broad-stroke perspective with the
understanding that exceptions exist.
When discussing the availability
of insurance, a distinction must be
drawn between smaller portfolios, with
values less than $100,000,000, and
larger portfolios. Smaller portfolios
tend to only have the option of
purchasing their insurance coverages
from the various self-storage
dedicated insurance programs.
Larger portfolios have the opportunity
to reach out into the general
insurance marketplace and secure
comprehensive coverage, especially
property insurance coverage.
Flooding
Per the Federal Emergency
Management Agency (FEMA), from
2003 – 2012, the U.S. averaged $4
billion in flood damage per year.
Floods are the most costly natural
disaster when measured in terms of
dollar losses. Twenty-five percent of all
flood claims received by FEMA involve
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flooding that occurs outside the highhazard areas (100-year flood plain).
For most small operators, and even
some larger ones, flood insurance is
a nuisance impose