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Choosing the Right Insurance for Your Boat/RV Storage Facility

Ensure your boat/RV storage facility is not at risk due to insufficient insurance.

September 25, 2008

4 Min Read
Choosing the Right Insurance for Your Boat/RV Storage Facility

Self-storage facilities are looking for other sources of revenue and better ways to use space. There is also a trend toward ancillary services not traditionally a part of self-storage. It's important to be aware of the different exposures, risks, legal and insurance requirements for these ancillary services to best serve your customers.

Special Needs

Most homeowner associations have restrictions on storing recreational vehicles. So, boat/RV owners look to self-storage. Building a section for boat and RV storage on land reserved for future expansion might make sense. This area can be devoted to total open spaces, canopies or enclosed buildings. Whichever way you go, here are some other considerations:

• Your contract should be specifically written for the storage of moving vehicles and boats. It should contain wording limiting or restricting the storage of hazardous fluids, gases and tires.

• Drip-protection should be mandatory for all vehicles. This should be included in your lease agreement. Contact your legal advisor for advice about this document and send a copy to your insurance company.

• You should always obtain a copy of the owner’s vehicle registration and insurance policy. Make certain that both items carry the same name as your tenant. Do not accept either if written to another individual/business. Also, establish a system to obtain copies of renewals to keep your files current.

• Photograph the vehicle when it is brought in to be stored. This can provide assistance in the event of a claim regarding the condition of the vehicle. Keep the photograph in the tenant’s file.

• Install crash posts around building corners. Make sure aisles are wide enough for a truck/trailer combination to move in and out of the assigned space.

• Since the vehicles are larger than normal, you might want special gate sensors. A truck pulling a trailer needs a longer period of time to pass through a gate.

• For outdoor storage, paint lines to avoid tenants crowding other tenants. Spaces should be numbered in sequential order and included in facility-management software.

• If possible, separate the boat/RV storage area from the storage of household goods due to the increased fire-load.

• State lien laws should be followed in the event of delinquency. Although it is never easy to dispose of a vehicle, many states have a way to re-title a vehicle. Find out if there is a lien on the vehicle. Your best line of defense is to consult an attorney.

Services vs. Bailment

Once you start providing additional services such as parking, fueling or washing, you assume care, custody and control of the vehicle. Therefore, if you decide to perform additional services, contact your insurance advisor about additional liability coverage.

Liability and Responsibility

Ask your insurance agent about increasing the limits on your customers’ goods and the sale and disposal legal liability coverages, particularly because RVs are valued higher than the items in a typical unit.

Seasonal heavy rain, snow, hail, severe windstorms, tornadoes and drought are occurring more frequently across the United States. Outdoor storage does not provide much protection from weather elements, and tenants’ vehicles might be damaged. Canopies and sheds are susceptible to damage and, in the event of collapse, could damage vehicles underneath. Make sure your structures are built to withstand weather conditions and your insurance coverage is sufficient.

Is Your Security Adequate?

Adequate security is necessary to attract the right tenants, and to protect their vehicles and your facility. At a minimum, your site should be fenced and well-lit with a gate-access system and surveillance cameras.

Some facilities are using individual security systems attached to the vehicle. These systems will sound an alarm when the vehicle is moved or even shaken, and can be disabled in the office when the tenant claims his vehicle. Be aware if your facility is in a higher than normal crime area. Vehicle storage is more susceptible to crime.

Hazardous Cleanup Coverage

Boats and RVs carry large quantities of diesel fuel, gasoline and hydraulic fluids. A slow fuel leak occurring over the term of a lease can seep into and contaminate the property. This contaminant can also migrate to nearby units and adjacent properties.

Cleanup costs and property damage for your or your neighbor’s property and tenants’ stored goods can be substantial. If you have a dump station, you further increase your exposures to vandalism, carelessness or deliberate actions of contamination. Even if you contract with a professional waste haul and disposal service to remove and dispose of the material, you still may be partially financially responsible for the clean up and remediation of the site.

If you are already storing boats and RVs, or if you are considering adding this service to your storage offering, these guidelines will provide a checklist of liability items to consider and help keep your business as safe as possible. Your attorney and insurance agent will guide you through the process.

Randy Tipton is the owner of Universal Insurance Facilities Ltd., which has provided specialized insurance coverage to the self-storage industry for more than 12 years. Universal has clients in 49 states, with a commitment to providing A-plus-rated service; fast, fair claims handling at an affordable premium; and agents trained specifically in self-storage. For more information, call 800.844.2101; e-mail [email protected]; visit www.universalinsuranceltd.com.

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