Self-storage operators can prepare for the worst and provide better customer service by requiring all tenants to purchase some form of insurance. At the outset, removing the option to self-insure may seem like you’re forcing customers to do something they may not want to do. In reality, you’re doing a better job of protecting yourself and your customers.
Many of the larger self-storage operators have already established this company policy. Tenants either provide them with proof of insurance on their unit contents or purchase a dedicated tenant-insurance policy. Though compliance hasn’t happened over night, these operators have taken a stand; and now several smaller, independent operators are following suit. Put simply, if the tenant refuses to show proof of valid insurance or purchase a tenant-insurance policy, the operator will not rent him the unit.
A word of caution: Make sure you know and clearly understand your state’s laws concerning tenant insurance before signing on with an insurance provider. In many states, self-storage managers are allowed to sell tenant insurance without becoming licensed insurance agents. Many of the third-party tenant-insurance programs even offer a rebate on the premium to the facility owner or manager.
With the economy declining in recent years, maximizing income has been a challenge for most self-storage operators. Many have had to offer discounts and rent incentives just to stay afloat. Asking your customers to pay yet another fee seems impossible.
Yet as more self-storage operators make insurance a mandatory component to renting a unit, this extra cost will become the norm for tenants. Operators can also roll the cost of the policy into the rental rate.
There are numerous companies you can work with to create a streamlined and profitable tenant-insurance program. Most will even train operators in selling the positive aspects of this coverage. Check out each provider and learn about its program.
Making insurance mandatory at your facility won’t be easy at first. In the long run, however, you’ll be protecting your business and your customers, and will likely increase your facility’s overall revenue.
Mel Holsinger is president of Professional Self Storage Management LLC, which oversees the operation of more than 40 facilities in Arizona, Colorado and Texas. Holsinger has been in the self-storage industry for more than 25 years. He is a frequent speaker at Inside Self-Storage World Expos and other industry events, a contributing writer to Inside Self-Storage magazine, and a founding member of the Qualified Storage Manager training program. To reach him, call 520.319.2164; e-mail firstname.lastname@example.org; visit www.proselfstorage.com .