Self-storage units are a great option for housing valuables while downsizing or moving homes, saving belongings for a loved one, or managing inventory for a home business. However, many folks are unsure about maintaining insurance on stored items. How does it work? Is it necessary to insure stored items? Will a homeowner’s policy cover stored items? Are self-storage units insured through the rental agreement?
While storage facilities provide a safe place to stash belongings, a basic rental agreement does not include insurance protection against damage, theft, or fire. Therefore, it is important to understand exactly how to protect the value of personal property when utilizing a self-storage unit.
Many self-storage facilities require customers to provide proof of insurance for their property before entering into a rental agreement. While this is not an industry-wide requirement, it simply makes good sense to protect the value of personal property housed in a storage unit the same way one would protect the valuables within their home, by obtaining some type of insurance. Here are some things to consider.
Are Self-Storage Units Insured?
When renting a unit within a storage facility, a customer is provided with a safe place to house their items and can expect, with reasonable confidence, that their items will be protected to some degree. All storage companies offer some degree of protection, with locks, video surveillance, and other protective measures. However, a basic rental agreement does not include protection against theft, fire, or other damage. This is why insurance is so important.
It may leave you wondering since a basic rental agreement does not include the added protection of insurance, what options are available to customers? How do renters secure insurance on items stored away from home, within a self-storage facility? There are a number of options available, which include:
- Homeowner’s Insurance Policy
- Renters Insurance Policy
- Tenants or Self-storage Insurance Policy
Each option has benefits and limitations, which we will explore below.
- Homeowner’s Insurance – For anyone who maintains a mortgage on their home, homeowner’s insurance is required. Most policies will cover items stored within a storage unit, but it is important to understand the following nuances within your homeowner’s coverage:
- Items in storage covered under the Personal Property Coverage portion
- The policy should have “off-premise property” coverage information, which includes items in storage.
- Off-premise coverage is typically limited, for example, to 10% of total personal property coverage.
- Specific personal property items may have coverage limits, such as jewelry and portable electronics
This means that if a policy provides $50,000 in coverage for personal property, the coverage amount available to items stored within a storage unit would equal $5,000. Therefore, if a homeowner is storing more than $5,000 worth of items in storage, additional coverage may be warranted
- Renters Insurance – For individuals who do not own a home but are renting an apartment or house-sharing, a renter’s policy will provide some coverage for stored items, with coverage similar to homeowner’s.
- Coverage will be limited to a percentage of the personal property coverage amount.
- Review policy for the off-premise coverage limitations.
- Specific personal property items may have coverage limits, such as jewelry or electronics.
Just as with a homeowner’s policy, the off-premise coverage will be a percentage of the overall amount covered for personal property, usually around 10%- 20%. If necessary, additional coverage can be purchased.
- Tenants or Self-Storage Insurance – Tenants Insurance, also known as self-storage insurance, is a specific policy designed to cover items that are stored within a storage unit. It can be purchased in lieu of a homeowner’s or renters policy or can be obtained to offer additional coverage:
- For convenience purposes, can often be purchased through the self-storage company
- Can be designed to meet specific requirements, dollar amounts, etc
- Offered by most insurers
Tenant or self-storage insurance can offer a more comprehensive option for individuals who are storing high-value items, managing a business inventory, or simply want a higher amount of coverage available to them. These policies can also supplement renters or homeowner policies.
The Benefits of Self-Storage or Tenant’s Policy
Some self-storage facilities require that customers carry insurance on the items stored at their facility, and as such, most will offer some options for a tenant’s policy. While purchasing a policy through a self-storage facility is a convenient option, customers may fare better with a little research and comparison pricing.
Even for customers who have coverage through a homeowner or renter policy, selecting a separate storage policy can offer additional benefits above and beyond what exists with a typical homeowner/renter policy, such as:
- Lower deductibles
- Fewer policy exclusions
- Higher coverage amounts
- Large range of coverage terms
Customers should consider each of these benefits when deciding how to move forward in selecting a specific coverage option.
When making a claim on an insurance policy, the policyholder must pay a portion of the claim, which is called the deductible. For most homeowner policies, the deductible amounts are typically high, as homeowner policies are designed to cover damages that can include a total loss of the home. Therefore, a homeowner policy may have deductibles as high as $1,000 – $2,500 per insurance claim.
Since self-storage policies are designed to cover a much smaller liability from a financial perspective, the deductibles are much lower. A typical self-storage deductible is about $100 per insurance claim. For many customers, the low deductible offered by self-storage policies is a huge benefit over a traditional homeowner’s policy.
A big benefit to self-storage or tenant policies is the flexibility in coverage options when compared to a homeowner’s policy. Homeowner’s policies offer limited personal property coverage as part of a standard policy, which is limited even further for off-premise storage. Therefore, many items may not be covered under a homeowner’s policy, such as automobiles or business inventory.
Self-storage policies are specifically designed for the off-premise property, so while there may be some policy limitations on coverage, there are very few exclusions. Customers should speak with an agent to discuss the specific policy provisions and exclusions, as well as explore coverage options for items such as business inventory.
Higher Coverage Amounts
As discussed earlier, benefits under renters and homeowner’s policies are limited to a small percentage of the total policy liability for off-premise storage. For customers who are storing high dollar items in a storage facility, this can be a major concern.
An average homeowner’s or renters policy may only cover $5,000 in liability, which may be far too low for many folks.
With self-storage policies, there is plenty of flexibility in terms of coverage. Customers can choose the coverage amount that makes sense for them, whether $5,000 or $50,000. Policy premiums will increase as liability increases, so customers should be aware of their stored items’ true value before selecting their coverage.
Larger Range of Coverage Terms
Self-storage policies truly cover a huge range of circumstances, including weather events, such as hurricanes, tornadoes, and lightning damage; building issues, such as damage from faulty plumbing or fire, and damage or loss due to vandalism or burglary.
More importantly, customers can often select riders that will also provide coverage that is ordinarily excluded, such as damage from vermin or insects, mold, or flood.
These are not things that are typically covered under any policy and aren’t available as options with homeowner’s and renter’s insurance. However, for storage policies, there is flexibility regarding coverage options.
Selecting a Safe and Secure Facility
While having the right insurance is an excellent safeguard to protect personal assets, it is important to select a quality facility when storing personal items away from home. All storage facilities are not created equally, and there are several things to consider when selecting a location to store valuable assets:
- Onsite security options
- Staffing and Monitoring
- Customer Reviews
Location, Location, Location
While it may sound cliche, just like with housing, selecting the right storage facility location is important. Vandalism and burglary are concerns for storage facilities, especially those without 24-hour surveillance. Therefore, it is important to pay attention to where a facility is located when choosing where to store your valuable items.
Security is key when selecting a storage unit. Many units offer several layers of security to ensure the safety of their clients and their possessions. When selecting a storage unit, it is important to understand what security measures they offer, including in-person security, as well as video surveillance.
Other key security factors include proper lighting in all areas of the facility, motion-sensitive video cameras, a secure fence with a gated, password-protected entry system, electric door locks for indoor facilities, and a proper alarm system that will alert authorities about potential security concerns.
Staffing and Monitoring
In terms of providing a safe atmosphere for clients, it is important to select a storage facility that provides full-time monitoring and onsite staffing to assist clients and provide security. Many clients visit their storage facility before normal business hours, in the early morning, or after work hours during the week. When selecting a facility, potential clients should inquire about onsite support and security:
- What hours of the day are employees available to assist the clientele?
- What security measures are in place before or after the facility’s business hours?
Equally important, potential clients should inquire about the procedures in place after business hours to ensure client safety. Is there adequate lighting within the facility after hours? Is the facility monitored remotely during overnight hours? Is there on-call staff monitoring activity remotely at the facility? If a client has an issue or concern after hours, are there procedures in place to reach on-call staff for assistance?
Selecting a facility that has 24-hour monitoring, either onsite or remote, is ideal. Reputable facilities will have safety protocols in place to assist customers during the overnight and early morning hours.
Never underestimate customer reviews when considering a storage facility. When comparing different facilities, customers should take a moment to read through the reviews for each, paying specific attention to:
- Issues with security
- The overall quality of the units
- The helpfulness of the staff
With plenty of options available, potential clients should select a facility with several layers of security to ensure:
- The integrity and safety of the items stored
- 24-hour client access, extended staffing hours
- Safety measures are in place to protect clients from potential danger and hazards
Picking the Appropriate Storage Unit
With a variety of options available at several different price points, selecting the best storage unit for a customer’s specific needs can be a bit of a guessing game. However, there are several key things to consider when picking a unit.
Most facilities offer units from sizes as small as the smallest walk-in closets (5′ x 5′) to the size of a commercial trailer (10′ x 30′). When selecting a unit size, consider not only the number of items that need to be stored immediately but also what future storage needs you can anticipate.
It is better to select a unit that is slightly larger than necessary rather than selecting a unit that is too small.
Most commercial storage facilities offer basic guides to assist customers when selecting a storage unit. From storing seasonal items to packing up an entire four-bedroom home, most facilities have online or written guides that can help clients select the appropriately sized unit.
Length of Time Required
Storage needs can vary widely from client to client. For folks who use a storage facility to support a home business, storage needs may be long term. For customers who are moving from one place to another place, their storage needs may be very minimal, a month or two. Always consider the amount of time that will meet your needs when selecting a unit.
For individuals who require long-term storage, ensuring proper temperature control may be a concern, as is ventilation within the unit. Improper ventilation and temperature issues can cause the degradation of the items left in storage over a long period of time, so it is important to really assess individual needs to ensure the safety of valued items.
Many facilities offer climate-controlled units for people who live in hot climates or those who are storing items that may be sensitive to humidity and heat. In fact, there are many items that can be negatively affected by heat and humidity in a storage environment, such as:
- Leather furniture
- Medical Equipment
- Art, including photographs, paintings, etc
- Makeup and other toiletries
- Antiques and collectibles (stamps, baseball cards, etc.)
For individuals requiring long-term storage or who are storing sensitive materials, using a facility that provides climate-controlled units is a plus.
When selecting a storage unit, fire safety is a huge concern. Units should be separated by concrete or other fireproof materials that help contain unit fires and discourage the spread to nearby units. Facilities should have fire extinguishers located periodically throughout their facility at easy reach for both staff and clients. Working fire alarms should also be visible throughout the facility.
Clients can also do their part by:
- Not overpacking their individual units
- Refraining from storing flammable liquids or restricted items
- Refraining from using rigged electrical hookups, heaters, or other potential heat sources
Before selecting a unit, it is important to ensure adequate access is available. Are there provisions in place if a client needs to grab something from their unit at 2:00 am? Is there appropriate lighting available after dark so that clients can actually see what is inside their unit easily?
It is also important for clients to select the right size unit to make accessing their items easy. Leaving some space to walk around and quickly grab items from the back of the storage unit is key.
Over time, a client’s needs may change. They may need temporary access to electricity or lighting within their unit. They may not need climate control at first but require it later. When selecting a unit, it is important to consider future needs and pick a unit that provides more than just the basics. When meeting with facility managers, always ask about electrical access, lighting, and average temperatures within the individual units, as well as other amenities that are available within the facility.
Closing the Unit
In closing, there is plenty to consider when selecting a storage facility and unit. The safety and integrity of your personal possessions are of the utmost importance. Selecting an appropriate unit at a reputable storage facility is only the first step.
Just as it is important to provide adequate insurance for a home or a car, it is equally important to ensure that possessions stored away from home are also similarly protected through a homeowner’s policy, renters policy, or a specific self-storage insurance policy. The cost of the insurance is well worth the peace of mind knowing your items are protected.