Self-storage is a multi-billion-dollar industry in the United States. While most customers are concerned about the security of their items in storage, many don’t think about how or whether those belongings are covered by insurance in the event of damage or loss. If your insurance clients store items in a self-storage facility – and many of them probably do – it’s a great idea to ensure that they understand the options for insuring those goods.
- “If there are any problems, my homeowner’s insurance will cover it.”
This is not always true. Homeowner and renter policies do not necessarily include coverage for items stored away from the residence. If they do provide coverage, the policyholder needs to be aware of the limits, which may be insufficient for many items they might wish to store.
- “The storage facility has insurance, so I’m covered.”
Without a doubt, a self-storage facility will have an insurance policy that covers property belonging to the business as well as various types of liability. However, self-storage lease agreements (or rental contracts) typically make it clear that they DO NOT provide insurance for items stored by tenants. Many self-storage facilities offer their customers a stand-alone insurance policy that can be purchased when the unit is rented. These stand-alone tenant insurance policies typically offer higher limits than homeowner or renter policies for a relatively small premium, and the policy can be terminated when the tenant moves out of the storage unit.
- “I can store whatever I want in a storage unit.”
Self-storage lease agreements will specify items that are prohibited from being stored as well as the limit on the value of the items permitted in the rented unit. Prohibited items generally include things such as hazardous materials, combustible materials (kerosene, gasoline, propane, etc.), drugs, currency, furs, and many others. Similarly, tenant insurance policies also include coverage restrictions on certain items.
If your commercial or personal lines clients store items in a self-storage facility, make sure they understand the risk of exposure they may face if they choose not to purchase insurance for those valuables. For more information about tenant insurance, visit MiniCo at www.minico.com.