James Appleton, Director of Sales, Publishing & Special Risk, MiniCo Insurance Agency, LLC
There’s a reason people choose to store their belongings in a self-storage facility. Most often it’s an important life event, positive or negative, that drives someone to store their valuable possessions off site in a self-storage unit. Operators in the industry know that consumers have a choice and have learned to become practitioners of exceptional customer service.
Those of us with experience on the owner/operator side do all we can to explain to tenants that the facility does not insure their goods, but we know that few people truly take the time to read their lease or their insurance policy top to bottom. Thankfully, the requirement to either provide proof of insurance via a homeowner’s or renters policy or enroll in the tenant insurance program offered by the facility has now become a common expectation by the general public and it is rapidly being adopted across the country. It’s reasonable to assume that if they value the belongings enough to store them in a self-storage facility, they’d also want to make sure the items have the best coverage in the rare case of a loss. From a customer service perspective, by requiring evidence of insurance in order to store at your facility you are giving them the opportunity to review their current coverage and compare it to the program you offer. In most cases, they will realize that that there is a deductible component as well as limitations that may render their homeowner’s policy less desirable in terms of covering their goods in storage.
Larger operators adopted an “evidence of insurance” requirement quite some time ago, but the larger operators make up only a fraction of our industry. Independent operators with a single or handful of facilities often feel that they have a different set of business concerns than an operator with multiple facilities. The reality couldn’t be further from the case when it comes to the operator’s liability and the tenants protecting their property from a loss. Both small and large operators face the same issues with respect to liability and, while we attempt to address this in our leases, it’s not infallible and part of running a successful operation is mitigating exposure and potential loss. A loss can occur at any time, for a plethora of reasons, and as an operator you never want to be in a position where you have to explain to a tenant that the lease clearly indicates that you do not provide coverage for their goods nor do you want to be in a situation when you feel obligated to pay out of pocket for their loss.
Enter self-storage tenant insurance … these specialty insurance programs not only protect the customers’ goods, they can reduce your liability and often times include financial participation in the form of a commission or admin fee for your facility. How often do you have an opportunity as a business owner to reduce liability and increase revenue at the same time? Your managers are there to run the facility and, should a loss occur with a covered tenant, the tenant will deal directly with the insurance company’s claims department and not require you or your manger’s intervention, allowing you to maintain that exceptional customer service for which you’re known.
Most tenant insurance programs today offer an array of coverage limits, provide training and marketing collateral and support, and have exceptional claims departments that handle claims quickly and professionally, allowing you to run your business. Some states do, however, regulate the amount of coverage limit that can be offered and you should confirm if that is the case in the states in which you operate.