From what I understand, not every storage facility offers tenant insurance, and those that do dont require it. This makes no sense. As a storage operator, youre doing tenants a disservice by allowing them to go uninsured.

Should there be an unfortunate incident at your facility, you certainly dont want to have to tell customers Too bad, so sad you didnt have insurance. In some instances, theyll attempt to go after you if they experience a loss because theyll feel you didnt do your duty to ensure they had adequate protection.

Regardless of whether youre liable, youll end up paying a lawyer to fight the claim. Your insurance company might even settle with the disgruntled customer to avoid a costly lawsuit, causing an increase to your premium. Offering tenant insurance will help you avoid these scenarios.

Some operators are hesitant because they dont want the hassle of selling insurance. Others are afraid to require insurance because they believe the extra cost will encourage renters to go elsewhere. Get over it. Tenant insurance is a competitive advantage for the facility and reduces everyones financial risk. And did I mention you get a percentage of the premiums? You could earn some extra profit through these sales, as much as a couple of dollars per rental per month. Theres no additional cost involved in creating that revenue.

Making It Sell

Now that you understand the benefits of the product, how do you sell it to customers? First, require all renters to purchase tenant insurance.

Some customers will try to get out of purchasing insurance. Theyll hem and haw and test you to see if its really necessary. Stand your ground, and dont make exceptions. Heres a response that will silence objections and get the signature on the page: This is no different from renting an apartment. A landlord doesnt insure your belongings, and neither do we. Unless you purchase insurance, youll be out of luck if someone breaks into your unit or in the event of a natural disaster. To minimize your potential loss, we offer you tenant insurance.

Emphasize the peace of mind tenants will enjoy knowing their goods are protected. Dont discuss exclusionsthey can read about those in the paperwork. Point out that the cost is minimal compared to a potential loss (premiums typically cost $8 to $12 per month for $2,000 to $10,000 in coverage). Always ask how much coverage they would like to purchase, not if they would like coverage.

Some tenants will want to know if the current renters or homeowners policy for their residence covers stored goods. Let them know theyíll be exempt from your requirement only if they can provide you with a copy of the rider or endorsement from their insurance company. Until such proof is presented, they must purchase tenant insurance, which can be cancelled at any time.

If a tenant buys insurance through your facility and also has coverage through a renters or homeowners policy, youre in luck, as youll be third in line when they look to recover a loss. For all practical purposes, you are out of the liability loop and your risk is significantly reduced.

Add each tenants monthly insurance payment to his monthly rent and, whenever possible, set up the total amount for automatic payments from a bank account or credit card. This will be less hassle for everyone involved and help ensure payments are made on time.

Tenant insurance is a tremendous benefit, so dont be afraid to sell it. If customers are willing to spend their hard-earned money on storage, they should also be prepared to spend a few dollars a month to protect themselves against loss. You and your tenants will enjoy reduced risk, and the facility will gain greater profit.

Tron Jordheim is the director of PhoneSmart, an off-site sales force that helps storage owners rent to more people through its call center, secret-shopping service, sales-training programs and Want2Store.com facility locator. You can read what he is up to at www.selfstorageblog.com. For more information, e-mail [email protected].