Before the Loss: Your Duty to Self-Storage Customers
When my husband and I decided to live together, we both resided in townhomes that had next to no storage space. We planned to buy a house later that year, but in the interim, he moved in with me, and we put the bulk of his stuff into self-storage. Neither of us had ever used the service before, but I had already worked for many years as the editor of Inside Self-Storage magazine and knew a great deal about the ins and outs of the industry.
We chose a facility close-by, one we could get to quickly and easily should my husband ever need something from his space. We picked an indoor unit so the lock would be exposed to as few other people as possible. And when the manager asked if we wanted to purchase the optional tenant insurance, which would be paid monthly with our rent, I quickly answered with a resounding "yes."
My husband wasn't sure we'd need it, and thankfully, we never did. But I knew all too well the risk of storing one's goods in a third-party location. Accidents and crime can occur at even the most secure and well-maintained storage site. I wasn't taking any chances because, thanks to my background, I fully understood the ramifications of being without insurance coverage in the event of a loss.
But many of your customers don't understand. It's your job to explain it to them. Some tenants assume their goods will be covered under their homeowner's policy. Many others believe the facility owner will compensate them for goods that are damaged or stolen.
To begin, the self-storage rental agreement should clearly state the responsibility of the business in regard to tenants' stored goods, and the right of the customer to purchase supplemental insurance coverage. In addition, the facility manager should ensure customers are clear on key points of the lease, including the sections regarding liability. Finally, the facility operator should make tenant insurance available for customers, not only for their protection and peace of mind, but his own.
This week a writer for moneyville.com blogged about a break-in that took place at the Toronto, Ontario, facility where she stores her goods. Though nothing of hers was stolen, the incident prompted her to contact her insurance broker, who informed her that such a loss would not have been covered under her home policy. No doubt it's an experience many customers have, and usually when it's too late.
There are several options for self-storage operators who wish to offer tenant insurance to customers and very little excuse not to take advantage of one. In some states, you can sell the product yourself and make an administrative fee on each sale. If you don't want to get that involved (though it can be a nice little profit center), you can provide third-party programs that allow you to a) collect the customer's insurance premium with his monthly rent or b) route him to the insurance carrier directly for coverage.
If you have questions about the benefits or logistics of offering tenant insurance, or you're considering a change in your current program style, join ISS on Dec. 8 for a free webinar, "Risk Management in Self-Storage: Using Tenant Insurance to Minimize Expenses and Maximize Profitability." Presented by insurance experts from Bader Co., the online seminar will address:
- The importance of tenant insurance
- Advantages for the self-storage tenant and owner/manager
- How to increase participation in a tenant-insurance program
- How to turn a profit from the sale of tenant insurance
The event will take place at 11 a.m. ET and will include time for questions from the audience. Webinar registration can be completed for free at www.insideselfstorage.com/Webinars.aspx.
What do you do at your self-storage facility to ensure customer's understand their responsibility to insure their own goods? Which type of tenant-insurance program do you offer? Have you found tenant insurance to be a decent profit center at your site? Finally, if you don't offer a tenant-insurance option, why not? I'd love to hear from you on the subject, so please add your comments to the blog.
Here's to having a great weekend free of insurance-related incidents!
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