About 40% of all American households have a storage unit in one of the 52,000 storage facilities across the country, offering 2.8 billion square feet of space to rent and grapple with whether they need storage facility insurance.
If you have too many things and not enough space, you may wonder if you need the insurance offered at the storage facility. Like most insurance questions, the answer starts with “it depends.”
Most home insurance policies cover the home and your personal property – your clothes, furniture, home electronics, bedding, etc. But does that coverage apply when your personal property is not physically located in your home?
Most policies provide worldwide coverage for your personal property, with some limitations. The limitations apply when some personal property is “usually located” in another residence that the same insurance company does not insure. For example, suppose you own a home but also rent a vacation home for three months every summer. Your homeowner’s insurance policy indicates a personal property limit of $250,000. The amount of personal property you bring to the rental home would be limited to no more than 10% of the personal property limit on your home policy ($25,000).
With most companies, this 10% limitation on personal property does NOT apply to storage facilities, but it would be prudent to confirm in writing with your agent. Also, many storage facilities only let you waive their insurance if you can prove that your homeowners/renter’s policy will cover your items stored on their property.
Here’s how one company insures off-premises personal property or storage facility insurance:
“If the covered loss takes place at a residence, you own or live at that does not have contents coverage listed in this policy or any other policy issued by us, we will pay up to 10% of the coverage in this policy.”
This sentence’s keywords/phrases are “residence” and “live at.” The limitation only applies to a “residence,” or somewhere you would “live at.” A storage facility is not a residence (or at least not intended to be a residence), so the limitation would NOT apply. This is good news because it means you don’t have to buy the insurance offered by the storage facility, which is usually very expensive and very restrictive in its coverage.
Remember that if there is a loss to your personal property in storage, coverage will apply as if it happened at your home. This means your homeowner’s deductible and all of the policy exclusions would apply. So, if your homeowner’s policy excludes losses due to flood, a flood loss at the storage facility would also be excluded.
The Plexus Groupe is an independent insurance advisory firm. As a broker, we work with insurance companies to help find the best coverage to meet our clients’ needs. Contact Plexus at 888.529.8834 to discuss your personal lines coverage.