A few weeks ago, I began shopping for homeowners insurance. My policy was coming due and I was determined to make sure I was getting the best deal. I first called a well-known insurance company and received a really great quote. But when I compared it to my existing coverage it was lackinghence the lower rate. The lower number centered on what it would cost to rebuild my home. My current company had a much higher number, adding a few hundred bucks to the annual contract.
I spent a few days pondering if it was worth saving a few bucks now and risking the chance of something happening. Really, what are the odds of my house being a total loss? But there was one thing that gave me a reality check.
During a storm two months ago, a house in a neighborhood across from mine caught fire after a transformer blew. The fire started on the roof and destroyed the entire home. I saw the house the day after, then watched as they brought in crews and cranes to begin the demolition. At this point, the house has been taken down nearly to the slab and the rebuilding has begun. Sure, the likelihood of a fire to my home are slim, but should I take the chance with my insurance policy? No way.
Fires happen frequently in the self-storage business. Unfortunately, people store things they shouldnt, and storms and electrical failures happen. When it comes to prevention, there are several things you can do. Read this great article by Linnea Appleby of Lime Tree Management on ways to prevent a fire and how to cope with one if it does happen at your facility.
In addition, one of the most important things you can do is make sure you and you tenants are covered. This means reviewing your insurance policy with your agent annually or even semi-annually. Make sure you have the coverage youd need to rebuild if you had to. Your tenants should also be covered. That means introducing them to tenant insurance. There are many kinds available in the market today, theyre easy to sell and most providers will train you how to do it.
Some facilities, including some of the big players, are even making tenant insurance mandatory to rent. Yep, if a customer doesnt have homeowners or renters insurance and refuses to purchase the facilitys program, hes being turned away. I know in todays economic climate when every rental dollar really counts that seems hard to do. But read this article by Mel Holsinger of Professional Self Storage Management on why this can be a good thing for your facility. Managers and owners are talking about the pros and cons on this Self-Storage Talk thread.
If youre looking for more information on business and tenant insurance, be sure to join us at the Inside Self-Storage World Expo in Tacoma, Wash., Oct. 4-6. Harry Sleighel and Matt Schaller of Storage Property Protection will show owners how to turn a tenant insurance program into a manger motivation program.
If you cant make it to the fall show, dont despair. The spring expo in Las Vegas will include educational seminars on insurance as well. In the meantime, youll find a number of great articles on all types of insurance in the ISS archives.
Whats your take on tenant insurance? Have you made it mandatory at your facility? Post a comment below or join the discussion at Self-Storage Talk.