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4 Things Your Tenants’ Self Storage Insurance Should Cover

July 6, 2022

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5 min

Do you require self storage insurance at your facility?

There are many disasters that could befall a storage unit. From natural disasters to human error or theft, it’s very possible for the items inside of the storage units at your facility to suffer damage or be stolen.

While operators often like to jest about the kinds of things that some people store in a storage unit, the bottom line is that these items are important enough to your tenants to be stored. For some tenants, the items are even rather valuable.

 

 

Self Storage Insurance

The insurance you have on your self storage facility won’t cover the items inside the units, typically.

In this case, the insurance we’re going to discuss focuses on covering your tenants’ property inside the storage units.

There are multiple ways this can happen:

  • Their homeowners’ or renters’ insurance includes a small coverage amount for stored property.
  • They take out an independent self storage insurance policy.
  • You provide a tenant protection plan, allowing tenants to pay a small fee for additional coverage.

In any of these three scenarios, the goal is to protect your tenants’ belongings. If disaster strikes, your customers are much more likely to walk away with a good impression of your facility—and not attempt to cause you legal trouble—if their items are insured.

This is why requiring insurance is a good thing. Furthermore, it’s best to require insurance specifically meant for self storage units to ensure the best coverage. Homeowners' insurance often falls short of this task.

And if you’re going to require these plans, you should probably make some specifications as to what is required to be covered. 

Here are some ideas on what your self storage insurance should cover:

  1. Fire and smoke
  2. Theft and vandalism
  3. Natural disasters and non-disaster weather
  4. Floods

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1. Fire & Smoke Damage

Almost more than any other disaster, no operator wants their self storage facility to suffer a fire.

With luck, fires will be contained to a single storage unit thanks to proper construction and implementation of a good sprinkler system.

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If the fire spreads, though, it can cause insurmountable damage. Beyond the fire itself burning through buildings and items, the smoke that fills the air—and more easily spreads to other storage units—is itself dangerous enough to cause damage.

If you’re going to require self storage insurance, these two items should be near the top of your list for coverage requirements.

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2. Theft & Vandalism at Self Storage Facilities

Though the likelihood of break-ins occurring may vary based on your market, they’re always a threat.

Storage units—which are often filled with items and then left under the care of a single individual during the day and video cameras at night—are prime targets for theft.

If it’s not people cutting locks, then it’s thieves renting their own storage unit just to cut through a wall into the neighboring units. Done right, this could result in damages to or loss of property for entire rows of storage units in a single night.

No matter what security measures you take or what assurances of security you make to tenants, you should make sure that their items are covered.

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3. Natural Disasters & Weather Damage

Let’s face it: Even if you think fire or theft is unlikely at your self storage facility, mother nature is definitely outside of your control.

When it comes to the weather, all we can do is sit, watch, and be prepared.

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Like with most forms of insurance related to property, the cost of coverage for natural disasters and other weather events will vary based on your location. 

The kicker is that the importance of having them is usually directly tied to the cost, as a higher risk means both a higher price and a higher need.

Some common natural disaster-level weather events that you should look at requiring coverage for include:

  • Earthquakes
  • Tornadoes
  • Hurricanes
  • Wildfires (which may require different coverage than other types of fire)

Outside of disaster-level weather events, lesser weather patterns can also cause damage to items in your self storage facility! Depending on your facility and the construction of your storage units, everything from violent winds to rain to hail can cause problems.

Thankfully, most self-storage-specific insurance will likely cover many of these events.

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4. Flooding and Self Storage Insurance

You may be wondering why flooding is at the bottom of the list—and why it’s separate from the other weather events.

Flooding may be one of the more common events that could cause damage anywhere at all, including at a self storage facility.

We gave flooding a separate category for two reasons that you—as a self storage operator—need to pay attention to:

  1. Flooding can be caused by the weather, but it can also be caused by plumbing and construction issues at your facility, and the liability and coverage could change depending on the cause.
  2. Likely due to it being a much more common event than many others, self storage insurance will often leave out this coverage (at least from their basic policies).

If you’re going to be requiring self storage insurance (or providing a tenant protection plan), it’s probably a good idea to pay attention to whether or not the policies cover flooding.

Don’t take it as a given.

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