Storage Unit Insurance
(Protect your belongings while in self storage.)
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Jeff Green has held a variety of sales and management roles at life insurance companies, Wall street firms, and distribution organizations over his 40-year career. He was previously Finra 7,24,66 registered and held life insurance licenses in multiple states. He is a graduate of Stony Brook University.
Self storage is multibillion dollar industry in the US. Millions of Americans keep property in some sort of storage unit, either temporarily or long-term. In fact, 1 out of every 10 Americans rents off-site storage—it's the fastest-growing segment of the commercial real estate industry over the past few decades.
According to the Self Storage Association, the nonprofit trade organization for self storage business owners, the industry made $24 billion last year. On average, a 10x10-foot storage unit rented for $115 per month for a non-climate controlled unit, and $146 for climate-controlled.
Most demand for storage units is for temporary reasons. When people move, divorce, experience a death in the family or are displaced by a natural disaster, storage units help keep their belongings safe while they find long-term placement.
Unfortunately, these units are not immune to disaster themselves. That’s why it’s important to secure your property with storage unit insurance.
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Why Do I Need Insurance for My Storage Unit?
According to FBI statistics, more than 1 million storage units are destroyed by arson every year, causing an average of $11,000 in damage. Only 20% of arsonists who set storage units ablaze are ever arrested, making it highly unlikely that you will receive restitution.
These figures don't include accidental fire damage, which causes millions more in lost property. You'll want a self storage insurance policy to help you repair or replace your damaged property.
Many storage units offer video surveillance and other security measures. However, even if a theft is recorded, you may never see your property again. Unfortunately, once items are stolen, it’s unlikely that the police will recover and return them.
FBI statistics indicate that stolen property is recovered at a dismal average of 3% to 12%, depending on the item (excluding motor vehicles, which are recovered about half the time). Crime data show that jewelry is more easily recovered than household goods such as furniture.
A family heirloom is easier to track than a coffee table. However, many self storage insurance policies have limitations on what they cover. It’s important to review your policy options carefully before keeping Great-Aunt Mabel’s diamond necklace in a storage facility.
What If My Property Is Already Insured?
Your homeowners, renters or business insurance may cover the reason you're renting a storage unit in the first place if you are displaced by a tornado, fire or other natural event. In these circumstances, you may already have coverage, as long as the items are listed on your policy.
This coverage is almost always on a temporary basis and may have more limitations than if the property was still in your home or apartment. Off-premises home insurance coverage often has a limit of $1,000 or 10% of the policy's personal property limit, whichever is greater.
That means if the personal property limit is $100,000, up to $10,000 worth of property in a storage unit could be covered. Be sure to carefully review any existing insurance policy to find out if additional storage unit insurance may be necessary.
If you are in the process of moving, however, you may not have an existing insurance policy and you will want to find insurance for your storage unit.
What If the Self Storage Facility Offers Insurance?
Self storage facilities often require proof of insurance before renting the unit. Less scrupulous operators neglect to tell the potential renters about this fact until the day they move in, and then immediately demand proof of insurance before handing over the keys.
This forces the customer to purchase a policy from the facility. To prevent feeling rushed or forced, go in with proof of insurance. Many storage policies reimburse only for an item’s cash value at the time of loss, which may be less than the replacement cost.
It’s always best to look for a number of quotes from different storage unit insurance companies rather than settling for the facility’s policy, which can be expensive while offering less coverage.
Common exclusions in these policies include:
- Missing items. Items can only be considered stolen as part of a burglary if there is physical evidence of a break-in. If an item goes missing from your storage unit, it's considered a “mysterious disappearance” and isn’t covered.
- Damage from insects, rodents and other vermin. These exclusions are similar to homeowners and renters policies. Be sure to ask the facility operator how they manage the local moth and rat populations.
- Expensive items and documents. Policies offered at the storage facility can be more exclusionary than third-party insurance coverage. Exclusions usually include jewelry, art, furs, collectibles, cash, deeds, securities and other documents. Your homeowners or renters insurance allow you to purchase riders to cover these normally excluded items. However, this additional and vital protection is most often not offered through the facility’s insurance.
- Motor vehicles. Most of these policies also exclude vehicles. You may not have auto insurance on the car or truck you wish to store, so you will want to secure a car insurance policy or opt for a self storage insurance policy from a third party that includes such coverage.
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Where Can I Find the Best Storage Unit Insurance?
Whether you are moving, have experienced a covered natural disaster, or simply wish to store some property while you renovate a room in your home, you want to be sure your belongings are covered, no matter where you keep them.
Independent agents can help you review any existing policies you may have so you are certain everything is covered. These agents can also assist you in finding multiple quotes from a variety of insurance providers, enabling you to choose a self storage insurance policy with the best coverage at the most affordable rates.
Contact an independent insurance agent near you to find the best self storage insurance.
Insurance Expert Jeff Green