The word “insurance” immediately strikes up thoughts of cars and houses as well as less tangible but infinitely more important things like health and life. But don’t forget about the items in your life that you care about. Putting something like furniture, clothes or appliances in self storage doesn’t signify a lack of care for them, but rather the commitment to continue keeping and caring for them in the future. Self storage insurance is just the next logical step! However, there are things you should know before signing on the dotted line.
To navigate this important step, we’ve reached out to Bill Howe, manager at Yardi’s Risk Management Solutions department and specifically the GoodShield Storage Protection division. GoodShield offers protection for self storage tenants against damage or loss of stored belongings due to fire, smoke, lightning, wind, water damage and theft.
Many questions regarding self storage insurance are answered with “first check the details of your policy.” Policies can vary by insurance company, and legal definitions can vary by state, so it’s often hard to give universal answers to some questions. But what are some of the universal things people should avoid when shopping for storage insurance, regardless of company or state?
Avoid any coverage that sounds too good to be true. Also avoid large coverage amounts with minimal premiums, policies that do not cover theft, or coverage that is not enough to cover ALL of what you have stored. Do not accept a policy that doesn’t offer “Replacement Cost” (RC) instead of “Actual Cash Value” (ACV) coverage.
Homeowner’s or renter’s insurance can cover some stored items up to a certain percentage. Is this enough for most storage users?
This depends on the total value of the items in storage. Most renter’s policies traditionally provide 10% of the policy’s total limit for contents/personal belongings off premises. So, if a policy has a contents coverage amount of $10k, any loss to items off-premises from the covered dwelling would only be covered up to $1,000. However, many policies specifically exclude items that are stored in a professional storage facility. So always check your policy and speak with your agent / representative to make sure your policy will cover these items.
Many storage facilities offer their own storage insurance. Is it usually better to go with this option or to go with a third party?
Storage facilities that offer their own coverage are an easy and convenient way to cover your stored items. However, this also always depends on the company that actually underwrites the insurance. Just be sure that the coverage offered is from a reputable insurer. In addition, it can be very difficult to obtain third party coverage specifically and only for stored items without purchasing an Inland Marine policy, which tends to be more expensive.
Some self storage users live in areas with high risks of earthquakes, floods, hurricanes, wildfires and so on. What should they expect when looking for storage insurance?
Earthquake is usually an excluded peril on these policies. However, it is available in high-risk areas. Flood coverage is also usually available, and wind is usually a standard covered peril. Policies usually cover fire, regardless of the source. In some areas, you can add additional endorsements to cover some of these items. It very much depends on the location.
Can you tell us a bit about the specifics of vehicle storage insurance and how it applies to vehicles that are declared legally off the road?
This all depends on the policy; some policies specifically exclude motorized vehicles. This is truly a case of checking the policy to make sure those items are covered and not excluded.
What advice do you have for those who need to store more valuable items, like jewelry or art? How often does the renter need to contact an evaluator when insuring such items?
Owners need to cover items such as these under an endorsement to a homeowners or renters policy; storage insurance will have small limits for these items if any coverage at all. There may be limits as to what, and how much, you can add to this coverage. There are also stand-alone policies in the marketplace that are available specifically for these items. Usually this will be via an Inland Marine policy. Also, this will almost always require recent professional appraisals for all “high-risk” (high-theft/high-value) items.
A quick scenario: A storage user fails to pay rent on their unit for several months, and the facility, after exhausting all legal recourse, decides to auction off or otherwise dispose of the contents of said unit. The items are still covered by a third party insurance policy, which the user still pays. What happens?
This is a very tricky question. Since the user is under contract and the owner / operator has the legal recourse to sell or dispose of the property, coverage will not come into play for these items. Also, the user would NOT be able to claim the items as lost or damaged. The policy in place would essentially be void due to a breach of contract with the owner/operator.
Can you tell us a little more about GoodShield and what it does differently from other insurance policies?
The most important differentiator between GoodShield and other programs is our proprietary integration within the facility management software platform. This greatly reduces the work for the on-site storage staff and provides immediate turnkey coverage for renters. The advantage is smooth, “hands-off” policy integration and management, as the system does most of the work. In addition, all renters are pre-approved and there are no underwriting questions or credit checks. The claims process is also streamlined and faster. All of this makes the program exceptionally convenient for both the renters and the on-site facility users.
If you’re currently looking for a self storage unit, be sure to check out storage facilities near you and use the included contact number to get all the details related to insurance and amenities.
The goal of any insurance policy is to make the unexpected a little less so, no matter what you insure. Take the time to research policies carefully and make sure you know the true value of your belongings and the storage unit size you need. Songwriters and poets love saying “you never know what you have until it’s gone” but good storage insurance says otherwise!