El Niño Could Cause Problems for California Self Storage Facilities

Last Updated on March 14, 2024

By Alex Hassel, Storage.com

Tornadoes and floods have devastated parts of the United States recently, but some are concerned that mudslides and more flooding could be coming to California next. In a recent article written by Beverly Liu, an underwriter for Ponderosa Insurance Agency, she warns that with heavy rainfall coming from El Niño, many homes and businesses, including self storage facilities, could be in danger.

Liu says that after a long drought in California, rain is great news for many, but it could also bring some problems to the area. El Niño arrived in the fall and will stay until the spring. Heavy rainfall typically hits the region starting in January. With so much more rain, this brings concerns about possible floods and mudslides.

Liu says that now is the time to prepare for those kinds of disasters. She lists a link to The Disaster Center, which provides tips on how to prepare and minimize any damage that could come from a flood. Some of those include keeping insurance policies, documents, and other valuables in a safe deposit box, building barriers like levees, berms, and flood walls to stop water from entering your building, and sealing walls with waterproofing compounds to avoid seepage through cracks.

Another big issue that could arise in California is mudslides. Areas that recently faced drought and fires, Liu says, are more at risk for mudslides. She lists information from the CDC that can help you determine if your self storage facility is in danger of a mudslide. It says areas at risk include those where fires and other human activities have destroyed vegetation, places where landslides have happened before, locations at the bottom of slopes or canyons, and other areas near streams or rivers.

The CDC adds that before an imminent mudslide, be prepared by assuming that steep slopes with little vegetation are vulnerable to landslides, learning if mudslides have occurred in your area before, and developing emergency and evacuation plans for your business.

So what about the insurance angle? If this happens, are you prepared for it financially? “We highly recommend to contact your insurance agent to go over your policy with you and check if you have flood coverage, including mudslide or mudflow and what is the flood deductible so the only unpleasant surprise you have is the snake found in the flood debris,” says Liu.

When you take these steps, you’re not only protecting your businesses, but the property your renters have in your storage facility. Liu adds, “Most storage tenant insurance programs exclude flood, mud flow, or mudslide in their program, so when mitigating damage to your property, you’re helping in protecting your tenants’ stored property as well.”

Blake Johnson, Director of Underwriting at Ponderosa Insurance, says that if a storage facility wants flood insurance coverage, they’ll need to enroll in FEMA’s National Flood Insurance Program. Once the company is enrolled, the policy doesn’t go into effect for 30 days.

As for coverage for renters, that’s up to their own insurance policy, says Johnson. “A tenant is never under the facility’s insurance,” he says. “A tenant may or may not have coverage for flood insurance, but most tenants don’t. With the high price for flood insurance, it’s typically unfeasible to buy coverage just for items in storage.

Mudslides can be covered by flood insurance if they’re caused by flooding. Otherwise, a policy owner may have to rely on earthquake insurance.