Americans have a lot of stuff, and that has led to a building boom of self-storage units across the country. SpareFoot, an Austin, Texas-based business that helps consumers find and book nearby storage facilities and tracks trends in the industry, reports that there are more than 50,000 self-storage facilities in the U.S. Nearly one out of every 11 Americans rent space in a self-storage facility. With the increase in storage units has come an increased need for storage unit insurance.
A number of demographic trends have led to the increased use of storage units. Baby boomers moving and downsizing in retirement and yet unwilling to part with a lifetime of memories are one such trend. Housing issues precipitated by the Great Recession, from foreclosures to an inability to find affordable housing as the market recovered, have also led people to store their possessions in storage units.
Whether you need the extra storage space to house the classic car you want to work on or because you’re moving and need a short-term place to store your household items while you find a home in your new city, it's important that you know how to get storage unit insurance.
It is best to store your items in a secure facility, with insurance covering your valuables. Also, research your options for storage insurance to find the policy that works best for you.
Do you know what your current policy covers?
If you're a homeowner, your existing homeowners' insurance policy most likely includes personal property coverage. This coverage does usually cover items that are stored off-premise. However, your policy might have a limit on how much coverage is extended to items that aren't physically located in your home, so it's important to know what is in your existing policy.
It is also important to know your coverage limit. Talk to your local insurance agent to find out what your policy does and does not cover when it comes to your self-storage unit. Check to see that your storage unit is protected from things such as water damage, smoke damage, earthquake damage, and damage from insects. Also, make sure that your more expensive items are insured, in case of theft (you may need to set up a separate policy.)
If your current homeowner or renters insurance policy has an off-premises cap of 10 percent, and your existing policy covers $200,000 in personal belongings, losses incurred in a storage unit would be limited to $20,000.
The same types of provisions and exclusions generally hold true for renters' insurance policies as well. While renters insurance covers your belongings, there might be a cap on the amount of coverage for items you are storing outside of where you live.
Bottom line: Don’t assume that your homeowner's or renter's insurance policy will cover your belongings at the same level as your possessions in your home, apartment, or condo.
Make certain to review what named perils cover your items when they are stored off-premises. Fire, theft, and vandalism are common named perils, but there are likely some important exclusions that you should take note of, such as flood damage or loss caused by earthquakes.
If your existing policy does not cover your belongings when they are stored off-site, you will need to purchase separate storage unit insurance.
Did you do research on the storage facility?
If you're going to be storing your possessions with someone else, it makes sense to thoroughly research the self-storage facility. If possible, visit the facility in the evening to see if it is well-lit after dark.
Check for security features such as guards present around the clock or security cameras. Is it gated and secured with a passcode? Also, check for cleanliness, and inspect any unit you are thinking of renting for evidence of pests, including rodents.
If you're in an earthquake-prone area, you might need to add an earthquake rider to any storage unit insurance, as that's unlikely to be a covered peril. Make sure that the facility doesn't show any signs of past flooding, and check flood plain maps if you think there's any chance the location might flood flooding is also typically excluded from coverage.
Review the storage unit contract to see if there are any prohibited items or restrictions on what you can store. This is important because if you violate the terms of your agreement by storing a prohibited item and it causes damage, you might not be able to claim your loss.
Did you make sure to assess what you're putting in storage?
After figuring out what your existing policy covers, including covered perils, examine what you are looking to keep in your storage unit. If the value of the items you're storing exceeds the cap in your existing homeowners or renters insurance policy, you should purchase separate storage unit insurance.
The type of storage unit insurance you will need depends on what you're storing. Practically speaking, it's best to store high-value items in your home, not in a storage unit. However, if that's unavoidable, consider getting additional insurance on those items, called a personal articles policy (also called a personal articles floater, or valuable property rider).
This is separate coverage for high-value items, such as jewelry, artwork, antiques, and guns. Also ask about special coverage for high-dollar electronic equipment, such as drones, that you’re considering storing.
Keep in mind that if you have a home-based business or keep the business property at your home, your homeowner's insurance will not cover losses associated with business equipment kept in a storage unit. You must maintain separate business insurance to cover equipment associated with work.
If you're planning on storing a vehicle, such as a car, motorcycle, boat, or snowmobile in a storage unit, there are two things you must check:
- Check with your insurance company to find out what kind of coverage you will need. If you’re storing a car, you might be able to suspend your collision coverage while you’re not driving it.
- Check with the storage facility to make sure that you’re allowed to store a vehicle in one of their units. Even if you’re allowed to store a vehicle, there might be some requirements you’ll need to meet (such as showing a title and proof of insurance), and some restrictions.
Is insurance offered by storage facilities?
It's also possible to get storage unit insurance from an insurer that the storage facility partners with, outsourcing the coverage. Because self-storage facilities almost always require proof of insurance for belongings, many offer insurance coverage, but it's important to understand that the self-storage company isn't the insurer, they are working with an insurer who partners with them.
This is an important distinction because if you already have a policy (such as car insurance) with an insurer and you need to purchase separate insurance for your items in storage, you might be eligible for a discount for adding a new policy. So, even if you don't have an existing homeowners or renters insurance policy, but do have auto insurance, check with that insurer first before purchasing insurance coverage through a storage facility.
Sometimes self-storage units are needed quickly if your house sells faster than anticipated and you don't have a new place to live yet, for example. Packing your items quickly may be necessary. Even if you have to do things in a hurry, take the time to investigate and see if you need to get storage unit insurance.
Call and talk to your local insurance agent about which protection policy would be best for you and your storage unit. You can also use our free tool to compare insurance quotes in your area. It's simple, just enter your zip code!
If you’re shopping for homeowners or renters insurance, see which companies other homeowners and renters recommend:
- Best homeowners insurance companies according to consumers
- Best renters insurance companies according to consumers
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