Is Storage Unit Insurance Right For You?
An unexpected loss is always an unfortunate occurrence, no matter whether it was a result of theft, natural disaster, or another accident. However, when these losses do occur, it pays to be prepared—and that means being properly insured.
The same is true for self-storage facility owners and their tenants. If you own a storage facility, you should want to protect your property, buildings, offices, and other assets from unexpected loss as much as possible. Insurance can offer that protection.
In this article, we discuss the types of insurance policies and coverage you should consider for your self-storage facility.
What Kind of Insurance is Available for Self-Storage?
When you hear about insurance for self-storage, there are two main policies it refers to: insurance for self-storage businesses and facilities (that you purchase) and insurance for individual self-storage units and their contents (that your renters purchase).
As a self-storage business owner, you should insure your facility for the same reasons you would any other property: to protect yourself from liabilities, damages, and other unexpected costs. However, your storage facility insurance may have limited coverage for the actual belongings your renters choose to store inside their individual units. In case of a natural disaster, theft, or other loss, your renters should have their own coverage to supplement yours. That’s where individual storage unit insurance comes into play.
Let’s take a look at these two policies in greater detail.
Storage Business or Facility Insurance
Storage facility insurance is a type of small business insurance that typically combines property and liability insurance with other common coverages or add-on policies. They protect the physical storage facility building(s) in case of damage as well as your company itself in case of a liability lawsuit. Nationwide’s self-storage insurance, for instance, insures everything from storage unit structures to your office buildings to lawsuits and injuries.
Purchasing insurance for self storage unit facilities is always a good idea, namely because you never know what could happen to your company or facility. It’s best to be as prepared as possible, even if this means putting away a little money each month to put towards your insurance premium.
What Does It Cover?
Self-storage facility insurance coverage can vary depending on your location, business needs, and personal preferences. Here are some of the most common coverages a policy could include:
- Physical damage to the facility
- Damage to individual storage units
- Damage to office or leasing buildings
- General liability, including lawsuits and casualty coverage for injuries
- Business income (in case of interruption of income)
- Crime insurance in case of break-ins or theft
- Equipment breakdown coverage
- Sales and disposal liability
- Other specialty coverages
How Much Does It Cost?
Most storage companies in the U.S. pay an average self storage cost for insurance of about $400-$700 per year. This premium typically covers around one million dollars’ worth of insurance coverage. However, the premium you pay depends on a variety of factors, including where you’re located, what kind of coverage you want, how many employees you have, and your deductible amount.
How to Insure Your Storage Facility
To insure your storage facility, first choose an insurance company and read online about the policies and coverage they offer for self-storage commercial insurance. Next, either submit your information online or get in touch with an insurance agent to request a quote for your insurance. Your agent will work with you to build the best plan for your money with an appropriate deductible and any add-on policies that you want.
Storage Unit Insurance
Unlike storage facility insurance, insurance for individual storage units is comparable to traditional renter’s insurance: it protects your tenants’ personal belongings inside a storage unit rather than the storage facility itself.
Personal belongings kept in storage units may be covered by a typical renter’s insurance policy. These policies typically protect personal property against vandalism, theft, and other weather damage (although according to Progressive, mold, mildew, and flooding usually aren’t covered). They also typically have “sub-limits,” or a maximum amount the insurance company will pay for items in storage units (typically around 10% of a renter’s personal property coverage or $1,000).
Some renters may also find that their stored belongings are covered under their homeowner’s insurance policy. Even though these items are not located in their homes, homeowners’ insurance often includes “off premises” personal property coverage, which can usually protect belongings outside the home as well. Up to a set coverage limit (usually up to 50% of the dwelling coverage limit), these policies can provide coverage for fire, theft, vandalism, and lightning. Homeowners policies may also offer scheduled personal property coverage to protect specific high-value items.
What Does It Cover?
Storage unit insurance, whether part of a renter’s, homeowners, or separate storage unit policy, typically protect storage unit contents from any of the following:
- Fire
- Lightening
- Vandalism
- Theft
- Severe weather (e.g., ice/snowstorms)
Common storage unit exclusions in a traditional renter’s or homeowner’s policy include flooding and water damage, mold, power failure, and poor maintenance. However, stand-alone storage unit insurance policies may cover these potential damages and others. Stand-alone storage unit insurance also typically kicks in before a renter’s or homeowner’s insurance policy, but in case of an accident, encourage your renters to call their insurance companies themselves to check where they should make a claim first.
How Much Does It Cost?
If your customers purchase storage unit coverage through a renter’s or homeowner’s policy, the average cost is difficult to say as the coverage is bundled and included with others. The cost of separate storage unit insurance naturally depends on the specific policy your customers choose, its monthly deductibles and premiums, and the coverage offered. However, on average, insurance purchased through a storage unit company will cost anywhere from $15 to $30 per month.
Should You Require Your Customers to Purchase Storage Unit Insurance?
Renter’s and homeowner’s policies provide only limited coverage for items in storage units, so you may decide that these policies are not enough. If you think your customers need more coverage than what one of these policies would typically cover, you may consider requiring your customers to purchase rental storage unit insurance as a separate policy. Since these policies are typically very affordable, many storage facility owners choose to do so. You can even help your renters out by pre-preparing a policy with an insurance company that includes the coverage you deem necessary. You can then offer it to new customers when they sign a lease with you instead of requiring them to research and find their own policy.
Conclusion
Just like any valuable asset, storage unit facilities, business, and the belongings stored in them need to be insured. With so many affordable options and coverage plans, there’s no reason why both you and your renters shouldn’t get insured for protection against any unexpected event that might occur.
