What Insurance Customers Should Know About Off-Site Storage
One problem that many homeowners run in to over time is that they experience a shortage of space for all the things they’ve accumulated. Many of these people — your home insurance customers — turn to storage units for help, but they don’t completely think through their decisions.
For instance, when calling around to the different units, they decide based on pricing without giving much thought to security. They take for granted the insurance liabilities and the possibility that their valuables could be vulnerable.
As an insurance agent, you can help your customers through this process by sharing the need-to-know details with them. The Insurance Information Institute (I.I.I.) recently took aim at this very topic.
The group’s vice-president, Loretta Worters, explains why it’s so important to give pause before signing up with a storage facility.
“If an item is valuable enough that you are willing to pay for storing it, you should be careful to protect it with the proper amount and type of insurance,” said Worters. “Even in the best managed storage facilities, theft, fire and other disasters can—and do—occur. So find out what types of losses will be covered by the storage facility and whether you need supplemental insurance.”
One out of every 10 households in the United States will have some kind of off-site rental facility, according to the Self Storage Association (SSA). This stat includes portable on-demand storage (PODS), and it represents a significant increase from where the U.S. was in 1995 (1 in 17 households).
If your customers are planning to rent a storage facility, the I.I.I. recommends sharing with them the following:
Have them talk to you about off-premises coverage. Remind them that some standard homeowners and renters insurance policies include coverage for personal possessions kept off-premises including a storage facility. Off-premises coverage includes theft and damage from fires, tornadoes and other perils listed in the policy. However, it does not cover for damage caused by flooding, earthquakes, mold and mildew, vermin or poor maintenance. You can also highlight the coverage limits, which tend to vary by company.
Have them check with the storage facility to see what protections they provide. Most facilities provide reimbursement based on the square footage of the unit, I.I.I. notes, adding that customers should check “both the coverage limits and whether it is provided on an actual cash value or replacement cost basis.”
Discuss their needs regarding special insurance or storage for expensive items. If they intend to store valuable property—art, antiques, jewelry or furs, there could be dollar restrictions under the standard homeowners or renters insurance policy for theft. Speak to the customer about adding a floater or endorsement to their policy in order to fully cover such items. Specialized storage facilities available for these types of items that maintain proper temperature and humidity levels, may also be worth considering. “Small items such as jewelry will cost less to insure if they are kept in a bank safe-deposit box,” I.I.I. adds, pointing out that “contents in a safe-deposit box are not insured by the bank.”
Encourage customers to create an inventory of items to be kept off-premises in storage. They should add items they plan on moving to the storage unit to their home inventory list. This will allow them to keep tabs on their belongings and make sure the right amount of coverage is in place.
Out of sight should NOT mean out of mind when it comes to a home insurance lead or customer’s valuables. Talk to your clients about off-site storage and see if they have the proper protections in place.