Spring 2019

IN THIS ISSUE:

Preparing for a Billion-Dollar Hail Storm

Billion-dollar hail events are on the rise. Data from the National Centers for Environmental Information (NCEI) reflect five such events in 2017 and three in 2018. Hail storms can cause catastrophic damage to self-storage facilities and often result in repairs or replacement of the entire roof or the damaged portions of the roof. For property owners in areas prone to hail storms, this is an expected, if decidedly unwelcome, potential peril. However, the pattern of these storms has been changing over recent years, becoming more frequent and more severe. It appears that this trend may now be the "new normal."

In response to this loss trend, insurers are applying stricter underwriting guidelines with higher deductibles, increased premiums, and endorsements limiting coverage. In addition, carriers have become more likely to decline 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 your 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.

• Roof Inspections and Maintenance – Schedule regular inspections with a qualified roofer to evaluate the condition of the roof and perform the necessary maintenance on any areas identified as defective.

• 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.

Your insurance agent is an excellent source for risk management strategies and resources. 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.