1 in 10 homeowners have this exposure – is it properly insured?

The most recent statistics lists 9.4% of households rent a storage unit and this percentage does not include how many of those actually rent more than one unit and short term renters that rent a unit for a month or two while moving.

Bottom line, this is a quickly growing industry that many customers are utilizing. As you will note, without the proper coverage, there are some definite uninsured exposures.

When consumers rent a storage unit, they are probably under the impression that they have the proper coverage. Yes, the homeowners policy does provide coverage, typically for 10% of the personal property limit in the HO policy. Obviously based on that limit, there may not be sufficient coverage. For example, customers with a $50,000 personal property limit would only have $5,000 coverage. Is this enough?

However, there are some other differences that folks renting storage units may not be aware of that are quite significant. Issues such as:

– Most HO policies do not provide coverage for losses from rodents or flood and certainly not for earthquakes or named storms while in storage. If coverage for these exposures is desired, it may be available through the homeowners’ carrier but at a hefty premium.

– Loss of personal property in the storage unit is subject to the HO deductible, oftentimes in the $1000 to $5000 range.

As with many other exposures (such as my recent posting on watercraft detailed), purchasing a stand-alone policy for this exposure may be the best approach. Coverage including the exposures mentioned above is available through organizations such as SnapNsure (www.snapnsure.net – underwritten by Hanover). These policies provide broader coverage yet are inexpensive with low deductibles compared to HO policies. The deductible for all primary policies up to $25,000 coverage is only $100.

Although this coverage is sold direct to the public, it might be an opportunity to educate your customers and to provide them with a resource to more fully address this exposure.

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