The recent upsurge in self-storage lawsuits is one of the reasons more facility operators are offering tenant insurance. Learn about debunking customer misconceptions around the product and how to maximize program benefits.

Mario Macaluso, Founder

February 7, 2018

4 Min Read
Reducing Self-Storage Liability With Tenant Insurance

Tenant insurance has been a much-debated topic in the self-storage industry. However, the recent upsurge in class-action lawsuits filed against facility operators has driven many to offer the product, to help reduce their liability. In fact, many are making it a requirement of rental; and customers who don’t show proof of some type of coverage for the belongings they want to store could be turned away.

The reality is many tenants don’t view this type of insurance as a value-added option, which is partly due to the following misconceptions:

  • Many see tenant insurance as just one more “add-on” that increases their monthly storage fee. This is often the prevailing mindset when an operator doesn’t take time to discuss the benefits of the product and the risks of failing to insure stored belongings.

  • Tenants believe their goods will be covered by their existing homeowner’s or renter’s insurance policy. However, these policies might not even extend to their storage unit. In fact, the deductible on these types of insurance is often higher than the value of the items in storage.

  • Many customers think the storage business will cover them if the unexpected happens. Sometimes, a facility’s branding and marketing can compound the belief that a tenant’s belongings are 100 percent safe in the event of a loss. For example, the website might state the property offers 24-hour video surveillance, outdoor lighting, key-card entry and an onsite manager. And while all these amenities certainly contribute to security, facility owners can’t protect against every conceivable loss.

Thankfully, these misconceptions can be debunked. When personnel are educated in the ways tenant insurance provides true value to renters, they’ll be better able to illustrate the significance of the product in their interactions with customers.

Maximizing Program Benefits

The fact is self-storage operators can’t protect against events like natural disasters. Furthermore, they don’t take care, custody or control of tenants’ belongings. Many offer tenant insurance so they can identify and transfer that risk, better protecting their customers and business.

In addition, renters appreciate having direct access to a licensed insurance agent to answer questions about coverage and handle a reported loss. It’s far better for everyone involved when a loss can be turned into a claim and handled by a professional insurance company.

However, reduced liability isn’t the only benefit tenant insurance offers. Are there any self-storage operators who wouldn’t appreciate the following perks?

Reassurance. Tenant insurance can deliver peace of mind for the owner and tenant. Knowing both parties are protected in the event of a loss lets everyone worry a little less and sleep a little more.

An untarnished reputation. Tenant insurance can help protect your business reputation. If tenants need to file a claim, they want a fast and easy resolution. If that doesn’t happen, many will turn to social media and share a less-than-stellar review of your company, hurting your standing and, ultimately, the success of your operation. A tenant-insurance program can help ensure the claims process goes smoothly and satisfies your customer.

Additional revenue and increased asset value. Another benefit of self-storage tenant insurance is it can be an added revenue stream. As competition increases and facilities look for new ways to maximize profit, more operators are considering add-on services. Industry data shows that income from an established tenant-insurance program can amount to thousands of dollars per year for some facilities. This ongoing revenue also increases the value of the property.


Self-storage operators must have confidence in the tenant-insurance program they’re administering at their facilities. They need to do their homework before signing with a provider and ensure the program meets the following key criteria:

  • Keeps pace with the highly regulated state-insurance environment. Failure to comply with regulations can result in serious criminal and civil penalties.

  • Offers comprehensive training support for facilities and employees. This is critical since training is required and regulated in many states.

  • Has a robust marketing program and materials to assist with promotion.

  • Offers expert, in-house customer service and state-licensed insurance adjusters who handle all claims.

  • Is proactive with reviewing claims and other program performance data with clients.

Now’s the perfect time to consider a tenant-insurance program for your self-storage business. Adding this tool to your risk-management plan could make 2018 one of your most successful, stress-free years yet.

Mario J. Macaluso is senior vice president for SBOA Tenant Insurance (SBOATI), which offers a tenant-insurance program created by and for self-storage owners. The company’s products are compliant with state laws and administered by Cornerstone Insurance Producers. SBOATI has won the “Best Tenant Insurance” category in the annual Inside Self-Storage “Best of Business” reader-choice poll for five consecutive years. For more information, call 800.792.0345; visit

About the Author(s)

Mario Macaluso

Founder, Best Self Storage Insurance LLC

Mario Macaluso is the founder of Best Self Storage Insurance LLC and a founding member of SBOA Tenant Insurance. As a certified insurance counselor, he provides risk-management and insurance services for self-storage owners and management companies. To reach him, call 888.212.5109; email [email protected].

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