Today, nearly 10% of American families utilize some sort of off-site storage space. Here are a few insurance factors to consider if you’re part of that statistic:
Coverage from your existing home insurance or renters insurance policy
Many homeowners and renters insurance policies include off-premises property protection for theft and damage from disasters such as fire. However, different insurance companies have different rules and regulations for how that coverage applies to items in storage. Typically, stored belongings may be covered if their total value is less than 10% of your overall homeowners insurance coverage, but you should check with your provider to be certain of your coverage.
If you’re using a unit to store your kids’ old college futon or other low-value items, your off-premises coverage may offer all the protection you need. However, if you’re storing high-value items such as antique furniture, you may be underinsured. Some renters choose to raise their insurance coverage limits or purchase separate floaters on their existing policies in order to protect their stored belongings. Others simply opt for different storage solutions, such as a bank safe deposit box for valuable jewelry.
Coverage from the storage facility
Many self-storage facilities offer insurance options for renters. In fact, a large number of storage facilities require a minimum amount of coverage and other regulations in order to even sign a rental agreement. About 75% of storage unit renters are covered by this type of insurance.
Within your rental agreement, it’s also important to note the maximum value your facility allows per unit. While the value of the contents in your unit probably won’t ever actually be appraised, this figure typically doubles as your renters’ insurance coverage limit – the maximum amount you could recover should you experience a total covered loss. That means if you’ve stored $10,000 worth of belongings in a unit with a $5,000 coverage limit, you’re way underinsured and should be prepared for the possibility of losing half your investment. Consider renting multiple units or raising your coverage limits.
Choosing the right facility
Typically, if your belongings are destroyed as a result of a poorly maintained storage unit, you’re on your own. For example, if the facility that houses your valuables doesn’t properly maintain its storm drains or other safety features, a heavy storm could leave your entire unit water-logged. The resulting water damage, mold and mildew most likely will not be covered by your homeowners insurance.
The Insurance Information Institute (III) recommends doing some research on a facility before storing any valuable items there. Check for a high level of security as well as good maintenance. For example, a permanent, reliable pest and rodent extermination contract is an excellent sign that the facility is well-maintained. You should also be sure to inventory every item you place in storage by taking photos and maintaining receipts and other documents in case you have to prove what you’ve lost in a covered claim.
If you have questions about how your belongings are protected when they’re in storage, contact your storage facility and your licensed insurance agent.