The self-storage world is not known for controversy. It’s usually pretty silent, compared to the scandals that erupt in, say, the film and music industries. But the topic of self-storage insurance leaves a bad taste in many people’s mouths.
In the past nine months, both CBS Atlanta and CBS San Francisco have written about Public Storage’s misleading insurance policies and the difficulty renters face when filing a claim. This negative PR has tainted the Public Storage brand. More concerning, it gives the self-storage community a bad name as a whole. That’s why I’m initiating a much-needed discussion on the matter, in the hopes of creating some transparency and consistency.
You should not require that tenants purchase your insurance package.
Many of you want to do well by your customers, to ensure they’re not left out to dry should their belongings be subject to catastrophe. But instead of mandating that tenants buy your insurance, simply require some proof of existing insurance coverage.
For the most part, homeowners’ or rental insurance will cover stored items. Several companies automatically provide it with their original coverage policy, meaning that forcing customers to buy your insurance wastes their money. Others ask their clients to buy an add-on that covers stored items. Either way, your tenants are generally better off dealing with their own insurance companies.
Storage-specialized insurance agencies tend to be stingy. It’s extremely difficult to get them to pay up. Tenants’ claims for common incidents like water damage, pests and mold are flat-out rejected. Willis, Public Storage’s insurance partner, even denied a customer when belongings worth $12,000 were stolen, despite clear proof of forced entry.
Should you choose to sell insurance at your facility, carefully read the fine print to understand what your packages cover. Also ensure that you are not selling insurance without a license. According to CBS San Francisco, Public Storage was illegally doing so. Finally, recommend that tenants call their current agent before buying your insurance, to determine what their existing policies cover.
Be clear and consistent, regardless of your policy.
Whether or not you require tenants to provide proof of insurance coverage, make sure your policies are consistent. Print your policy explicitly on leases, and make sure all of your employees are on the same page.
Public Storage recently ran into this problem. The company’s leases state that insurance is the tenant’s sole responsibility, yet employees require that tenants buy insurance with their unit rental. When questioned, on-site staff stated they felt uncomfortable with the order of operations, and blamed the corporation and their district managers.
Journalists naturally had a field day with this finger-pointing. These articles are certainly embarrassing for the company. Use what happened to Public Storage to your advantage— they’re likely one of your biggest competitors. If your facility has a consistent, transparent self-storage insurance policy, customers will likely choose you over Public Storage.
