01 Jun 1 in 10 Homeowners Have This Exposure – Is It Properly Insured?
Recent statistics say almost 11 percent of households rent a storage unit, and this percentage does not include the number of those who rent more than one unit or those that rent a short-term unit for a month or two while moving.
The point is: storage rental is a growing industry that many of your clients are utilizing. You may believe that your client’s current homeowners’ coverage is sufficient – but as you will see, there are possible 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 percent of the personal property limit in the HO policy. But 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?
There are also other differences (including coverage issues) in which storage renters may not be aware. Some are quite significant. Issues such as:
- Most HO policies do not cover losses from rodents or floods 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, often in the $1,000 to $5,000 range.
As with many other exposures, purchasing a stand-alone policy may be the best approach. Coverage, including the exposures mentioned above, is available through organizations such as SnapNsure (www.snapnsure.net). These policies provide broad 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 directly to the public, it could be an opportunity to educate your clients and provide them with a resource to address the exposure more fully.