roperty and casualty (P&C) insurance was a hot topic throughout 2024, with news of carriers restricting appetite in certain areas. So, it may come as a surprise to learn that this segment is starting the year on a high note.

P&C insurance is entering 2025 with remarkable strength as strong premium growth, slowing claims cost inflation, higher investment yields, and tighter underwriting have solidified profitability. The Swiss Re Institute forecasts the industry’s combined ratio at 98 percent for 2024; however, growth in self-storage assets in high-risk areas means a greater amount of property aggregate exposed to catastrophic events.

Severe convective storms—marked by heavy rain, hail, wind, and tornadoes—have surpassed hurricanes as the leading cause of aggregate losses. These storms, along with wildfires, continue to drive up property claims and impact self-storage property insurance rates. While operators in coastal states deal with hurricane risk, wildfire zones face limited options as admitted carriers retreat, leaving excess and surplus (E&S) carriers to fill the gap. Hailstorm frequency and severity is also a key factor in rate increases due to increasing claim costs.

In terms of rate trends, self-storage operators can expect to see varied increases in 2025 based on location and loss history. Operators in low-risk, non-catastrophic regions with minimal claims may face rate hikes of 5 percent to 10 percent. Facilities in high-risk locations and those with significant claims should be prepared to see rate increases of 12 percent and up. Finding carriers willing to underwrite these risks will continue to be a challenge.

To mitigate rising premiums and secure favorable policy terms, self-storage operators should focus on the following:

• Risk Mitigation: Investing in hail-resistant roofing, storm-proof construction, and wildfire prevention measures.
• Agent/Broker Relationships: Partnering with an agent or broker with self-storage experience.
• Coverage Flexibility: Opting for higher deductibles and tailored coverage to better align a high-risk facility with a carrier’s risk appetite.
• Catastrophe Mitigation: Negotiating with contractors pre-catastrophe can yield priority response and lower rates for material and labor.

Self-storage operators should expect both challenges and opportunities in 2025. Carriers remain competitive for low-risk business, and E&S solutions can address high-risk exposures. Prioritizing risk management and partnering with an experienced insurance professional will be important in navigating insurance market turbulence and positioning operations for long-term resiliency.