Legislation has been introduced in Kentucky and Maryland that, if passed, would clarify the ability of self-storage operators to offer tenant insurance to customers. Both bills would enable facility managers to offer limited-lines programs as agents of qualified insurers and are similar to measures recently lobbied for by state industry associations and the national Self Storage Association (SSA).
In Kentucky, House Bill 357 would add self-storage to its list of authorized limited-lines programs under which the state insurance commissioner may issue agent licenses. The measure stipulates that operators would be able to offer and disseminate tenant insurance as long as the limited-lines insurance program and carrier adhere to certain requirements. Those include clear identification of the insurance producer on related materials, and insurer-supplied instruction and training to each self-storage employee who may offer tenant insurance as part of their job duties. The bill is supported by the Kentucky Self Storage Association and SSA.
In Maryland, House Bill 603 is very similar, stipulating tenant-insurance programs offered by self-storage operators fall within the limited-lines regulations authorized by the state insurance commissioner. It would require that storage employees authorized to offer tenant insurance undergo a training program approved by the commissioner. However, each employee would need only one limited-lines license to offer insurance at multiple facilities in the state.
The Maryland measure also stipulates that self-storage operators would not need to obtain a license to merely disseminate brochures or promotional materials on behalf of an authorized insurer. If passed, the bill would go into effect July 1. It is supported by the Maryland Self Storage Association and SSA.
Both state bills would also require operators to make certain disclosures to customers, including a statement that insurance coverage may duplicate coverage in a policy already held by the tenant. If tenant insurance is listed as a conditional requirement on a rental agreement, customers would be able to satisfy the requirement by purchasing the insurance offered through the self-storage facility or by producing evidence of other applicable coverage.
Among the states to adopt similar self-storage tenant-insurance measures last year were Indiana, Oregon and Tennessee.