Storage Unit Insurance – Why Do I Need It and Where Should I Buy it?

By snapnadmin | Self-Storage Insurance | 4 comments | 21 January, 2019 | 6

Storage Insurance In the short or long term, millions of Americans keep their property in some kind of storage unit. Self-storage has been the fastest growing segment of the commercial real estate industry over the past few decades – as a result of which it’s reckoned that 1 in every 10 Americans rents off-site storage, in one form or another.

It’s a multi-billion dollar industry that’s been built up, one rental contract at a time. The Self Storage Association (the non-profit trade organization for business owners in this sector) estimates that $24 billion was made last year, from a market where on average a 10×10-foot non-climate controlled storage unit rented for $115 per month, while climate-controlled units went for a monthly rental fee of $146.

When people relocate, get divorced, experience a death in the family, or are displaced by a natural disaster, storage units help to keep their belongings safe while they look for longer-term placement. It’s because of this that the greatest demand for storage units is for temporary reasons.

However, self-storage units aren’t immune to disaster themselves. Which is why it’s important to secure your property with storage unit insurance.

Why Is Storage Unit Insurance Even Necessary?

The simple fact is that you need a storage unit insurance program to help you repair or replace any of your property which gets damaged or destroyed while in storage.

Statistics from the FBI confirm that over a million storage units are destroyed by arson each year. These fires result in average costs of $11,000 in damages – and since only around 20% of the arsonists who set fire to storage units are ever arrested, the chances of receiving compensation from the criminals are not good. Then there’s accidental fire damage, which causes millions more in losses to self-storage renters who aren’t insured.

Though many storage facilities offer video surveillance and other security measures, your chances of recovering items stolen from a storage unit are also minimal. FBI statistics suggest that stolen property is recovered in an average of only 3% to 12% of cases which are investigated by law enforcement.

These figures depend on the stolen property in question, with crime statistics showing that jewelry items (which are smaller, and therefore easier to track) are more easily recovered than household goods like furniture. The recovery rate for stolen motor vehicles is around 50%. But bear in mind that storage companies often set a limit to the value of the items which they insure – so high-priced items like expensive jewelry or classic automobiles may not be sufficiently covered under the policies they offer.

What If I Already Have Other Insurance?

If you’ve been displaced by a fire, tornado, or other natural disaster affecting your home, rented accommodation, or business premises, self-storage may have been the option you chose for housing and protecting the property you previously kept at those places. As long as these items are listed in your homeowners, renters or business insurance, you may already have coverage for them.

Coverage like this is nearly always issued on a temporary basis. It’s also classified as “off-premises” – meaning that the coverage will likely have limitations which wouldn’t apply if the property was still located in your house, apartment, or business premises. For example, off-premises home insurance typically imposes a limitation of $1,000 or 10% of the policy’s personal property limit (whichever is greater), for insured items held in self-storage. So only $10,000 worth of property in a storage unit would be covered, under a personal property limit of $100,000.

If you intend to rely on your existing property insurance for protecting items held in self-storage, you’ll need to carefully review the terms of your current policy, to make sure that additional coverage won’t be required. And if you’re relocating, you may not have an existing policy – so you’ll definitely need to get insurance for your items in self-storage.

Should I Buy the Storage Unit Insurance Offered By the Facility?

In many instances, a self-storage facility will require proof of insurance before renting out a unit. Besides their rental fees, insurance premiums represent an additional revenue stream for storage companies – so it’s in their interests to sell as many insurance policies as they can. In the worst case scenarios, storage facility owners will intentionally neglect to mention that proof of insurance is necessary until the actual point of sale – and refuse to hand over the keys to a unit until some form of policy document is presented, or a policy is bought and paid for on the spot.

And the policies that they offer may not be what you bargained for. Many of these plans will reimburse you only for the cash value of an item at the time of its loss – which could be an amount insufficient to replace it. And policies will often exclude a number of items and conditions from any coverage at all. Typical examples of this are:

Motor vehicles: As a general rule, insurance policies offered by self-storage companies will exclude motor vehicles from coverage. If you don’t already have auto insurance for the vehicles you wish to store, you’ll need to look into purchasing separate policies for each machine or shopping around for a third-party program of self-storage insurance which does include motor vehicles under its terms.
Damage resulting from the actions of insects, rodents, or other vermin: It’s important to ask the storage facility management how they cope with their rodent and insect populations, as damage from these creatures is typically excluded from coverage in a similar manner to homeowners and renters insurance policies.
So-called “missing” items: Any item which goes missing from your storage unit when there’s no physical evidence of a break-in may be described as such, or classified as a “mysterious disappearance”. Neither definition qualifies for insurance coverage under the terms for burglary.
“Expensive” items or documents: Storage facility insurance typically excludes more items from coverage than a third-party policy. Vital protection for items such as art, jewelry, furs, collectibles, cash, securities, title deeds, or other valuable documents will typically be absent – and you’ll need to look to a reputable third-party insurance provider, or look into the possibility of purchasing riders to your existing homeowners or renters insurance, if you want coverage for these.

Will I Get Coverage Against Flooding?

Though many storage facilities take measures to ensure that their sites are guarded against physical intrusion by thieves or vandals, many neglect to provide the structural and environmental features needed to guard against the effects of nature. As a symptom of this, the self-storage insurance offered by many storage companies won’t cover your belongings for the effects of seepage, flooding, or water damage.

The self-storage insurance program offered by SnapNsure™ provides the option of coverage against direct physical loss or damage to covered property, caused by or resulting from flood. A standard policy may be extended through additional flood coverage, starting at $1/month. And there’s a $100 flat deductible for any primary policy – meaning that as the policyholder, you’ll be responsible only for the first $100 of covered costs relating to flood damage.

Coverage against losses is determined by the limits indicated on the Earthquake And Flood Schedule – specifically:

The Flood Location Limit determines the maximum amount payable in any one occurrence, for loss to covered property at any one location.

The Flood Occurrence Limit sets the maximum payable in any one occurrence, for loss to covered property at all locations.

The Flood Catastrophe Limit indicated on the Earthquake And Flood Schedule sets the maximum amount payable for all losses to covered property, at all locations, during each separate 12-month period of your policy.

Will I Get Coverage in the Event of a Named Storm?

In the words of respected Colorado State University meteorologist and hurricane forecaster Dr. Philip Klotzbach: “…it only takes one hurricane making landfall to make it an active season.” And the changing weather patterns of recent years have produced a variety of hurricanes, typhoons, and weather events severe enough to have earned them a name (Hurricane Katrina, etc.) under the classification systems drawn up for describing these epic storms.

In states like Florida, Massachusetts and South Carolina where extreme weather events are common, there are generally laws in place to protect consumers from unscrupulous dealers who raise prices to extortionate levels during emergency situations, or immediately after a state of emergency has been declared. This applies to the self-storage market, where displaced citizens are often at a loss to find a safe place for their belongings.

Getting insurance coverage for extreme weather events is another matter. In fact, there’s only one company which offers “named storm” coveragefor property in self-storage – and that’s SnapNsure™.

The SnapNsure™ self-storage insurance program covers direct physical losses or damage to covered property, caused by or resulting from a “named storm” or water damage due to Named Storm. As with coverage for losses against flooding, maximum amounts payable are determined in accordance with the limits (Location, Occurrence, and Catastrophe) set out formally in their Schedule.

How Can I Find the Best Storage Unit Insurance?

Whatever your reasons for needing a self-storage unit – moving house, renovating your property, looking for more space, in the aftermath of a covered natural disaster, or other circumstances – you’ll want to make sure that the insurance program you choose for protecting those items is the best you can get.

Due diligence is a good way to start. Online searches and offline inquiries can yield a list of names for likely providers, and a visit to their websites can give you some idea of their terms, the way they treat their customers, and whether the company is a good fit for your needs. Look for case studies and testimonials from satisfied clients.

Consulting with an independent agent is a wise next step. A third-party consultant can suggest a list of self-storage insurance providers offering good terms at reasonable rates. They can also assist by reviewing any existing insurance policies you have, assessing what’s already covered, and identifying areas where additional coverage will need to be bought.

What’s My Best Choice for Storage Unit Insurance?

Simply put? In terms of its pricing, coverage, convenience, and reliability, the SnapNsure™ Contents Program is your best choice.

Insurance for your self-storage unit may be purchased directly through the SnapNsure™ website, allowing savings of 50% to 70% per month compared to other plans. This arrangement also allows you the luxury of selecting your storage facility, then paying for coverage on-site via mobile phone. Policies may be paid for on an annual or monthly basis, with coverage starting as soon as you’ve paid your first month’s premium, and your signed application is received online by the company.

And every SnapNsure™ policy has a standard $100 deductible.

And the comprehensive coverage you’ll get with SnapNsure™ also allows you to add specific incidents coverage for Named Storms, Flood, Rodent, and Earthquake – a combination of options which is uniquely offered in the U.S. by one company alone: SnapNsure™. Remember too that SnapNsure™ is the only insurance provider which offers Named Storm coverage for self-storage, at all.

SnapNsure™ is an independent (third-party) provider – so you won’t be tied into a limited coverage insurance plan from your storage facility. As an assurance of reliability, SnapNsure™ is underwritten by The Hanover Insurance Group – the holding company for one of the largest admitted insurance carriers in the United States.