March 15, 2023

2 Min Read
Connecticut Insurance Regulator Opposes Bill Allowing Sale of Self-Storage Tenant Insurance

The Connecticut Insurance Department is opposing Senate Bill 1037 (SB 1037), which would allow self-storage operators in the state to sell tenant insurance. The measure was introduced in February to the general assembly by the Insurance and Real Estate Committee and is similar to other industry legislation that has been approved in 42 states. It’s supported by the national Self Storage Association (SSA).

The state’s insurance regulator opposes the bill in part because it believes tenant insurance is “complex” and should be sold only by “knowledgeable and qualified insurance professionals.” Though the measure would require self-storage owners to obtain a license, it doesn’t require any formal education or proof of competency to sell coverage, according to the source.

While SB 1037 would permit self-storage employees to sell policies under the owner’s license, the bill also excludes an operator from licensing requirements if they only make promotional materials available to customer or engage in billing premiums or collecting payment, the source reported.

“The combination of marketing and these other types of activities may cause confusion for the consumer as to the person or entity responsible for the sale of insurance,” the insurance department said in its testimony during a recent public hearing. “In addition, this framework provides the owners with responsibilities typically reserved for licensed producers although without the protections provided by regulatory oversight.”

Joe Doherty, senior vice president and chief legal and legislative officer for the SSA, argued that insurance agents aren’t interested in selling tenant-insurance policies because the premiums are relatively low. He also noted that the ability for self-storage operators to sell coverage to customers is a convenience.

If SB 1037 is approved as written, self-storage operators who sell tenant insurance would have to disclose to customers that coverage could duplicate protection from an existing homeowner’s or renter’s policy. They’d also be prohibited from selling tenant insurance as a requirement to rent a unit.

If passed, the bill would go into effect on Oct. 1.

Sources:
Insurance Journal, Connecticut Regulator Opposes Letting Self-Storage Businesses Sell Insurance to Tenants
Connecticut General Assembly, Senate Bill 1037

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