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Keven Moore: They might seem safe and secure, but beware the hidden risks of self-storage units


It’s that time of year when people are moving and relocating for a variety of reasons. including job transfers, divorces, changing school districts, downsizing and upsizing.

Many of you will be moving your stuff into self-storage units as you transition from one home to another. Others will discover that they have run out of storage space at home. Others might have purchased something that they had been saving up for and will now have to rent a self-storage unit.

In America, people stockpile an abundant amount of personal property in self-storage units. According to SpareFoot.com, the storage industry takes in $39 billion in annual revenue and about 1 in 10 homes rent some kind of storage unit to collect our junk. The self-storage industry has been one of the fastest growing segments of the commercial real estate market for the past 36 years.

At year-end 1984 there were only 6,601 facilities with 289.7 million square feet (26.9 million square meters) of rentable self-storage in the United States. Approximately 52,000 self-storage facilities are representing 1.709 billion square feet. The vast majority of the self-storage units nationwide are rented to military personnel (4 percent of all units); however, in communities adjacent to domestic U.S. military bases, military occupancy can be from 20 percent-95 percent of all rented units.

Americans stockpile an abundant amount of personal property in self-storage units. (Wikipedia photo)

As a homeowner that as rented a self-storage unit from time to time, there is a multitude of things to be concerned with as it relates to the safe storage of your belongings. Theft, vandalizing, water damage, infestation, and weather-related damage would all top that list.

Regardless of how safe and secure a self-storage unit appears, you also must be concerned with an illegal activity that can sometimes occur within the boundaries of these properties. For instance, entrepreneurial illegal drug manufacturers have been known to use these self-storage units as meth labs. This is to avoid detection by law enforcement and to keep the dangerous process away from their own homes. As a result, all nearby storage units would be at risk of a fire/explosion and/or contamination resulting in a total loss.

With all these potential loss sources while renting a self-storage unit, the first question a homeowner or even a business owner that needs temporary storage unit should ask is, are you adequately insured?

Standard storage unit rental agreements hold that the tenant renting the space will assume responsibility for any loss or damage to property stored in the unit. So, the tenant would first look to his or her own personal insurance coverage in the event there is a theft or damage to your personal items being stored.

Usually, the typical ISO HO 3 form provides a limit of liability for personal property owned or used by an “insured” and located in a self-storage unit equal to 10 percent of the personal property limit. This limit may be adequate but not always.

As I’ve said before in many of my articles, when you have any kind of a life-changing event, one of the first things you need to do is ask yourself is, how does insurance come into play with this change and do I need to call my insurance agent?

Homeowners often may receive an inheritance of belongings or may have to store stuff for their children or deployed soldier son or daughter. While many have recently downsized from a larger home to a much smaller home due to long-term unemployment. As a result, many will rent storage units for their excess furniture, appliances, televisions, lawn equipment, tools, collectibles, clothing including furs and artwork, hoping that they will eventually move back to a larger home or will find time to decide what to do with this stuff at a later date.

But let us assume that a homeowner downsized from a $350,000 home to a $120,000 insured home with a personal property limit of $60,000. This equates to only $6,000 in personal property coverage for those items being stored at the self-storage unit, which would be grossly inadequate for many homeowners.

Keven Moore works in risk management services. He has a bachelor’s degree from the University of Kentucky, a master’s from Eastern Kentucky University and 25-plus years of experience in the safety and insurance profession. He is also an expert witness. He lives in Lexington with his family and works out of both Lexington and Northern Kentucky. Keven can be reached at kmoore@roeding.com

You should properly determine the value of the stored goods in the storage unit and the amount of coverage under his homeowners or tenants (renters insurance) policy. This will help to decide if you need to purchase extra insurance to avoid potential coverage gaps.

To close this insurance gap the first option is to increase the limit of liability coverage in the rental unit via the increased amount of insurance for personal property located in a self-storage facility endorsement. A second option is to add the collectibles, furs, artwork, firearms, and other expensive items to a personal inland marine policy or floater, which also should provide broader coverages concerning the perils.

A third and final option would be to purchase an extra insurance policy through the self-storage facility if available, which will probably be more expensive than via the homeowner’s endorsement.

When selecting a storage unit, you get what you pay for and here are some tips to assist you with selecting the appropriate storage facility:

• Select a rental company that has adequate security, such as proper lighting, formidable fencing, motion detectors, coded security pads, and 24-hour video surveillance cameras.
• If you are storing irreplaceable items, you should consider a storage unit that offers sprinkler protection, or at least offers hardwire smoke or heat detectors wired to monitored security alarm.
• Look for a unit that you can access any time of the day when it is much safer.
• Consider your need for a climate-controlled environment — this is particularly important if you are storing items that could be damaged by damp, cold, or hot weather such as upholstered furniture and archived items.
• Choose a unit that is well-maintained, clean, and pest-free.
• Ascertain the reputation and history of the rental company through referrals and the Better Business Bureau.
• Select a rental company that offers competitive rates for insurance for your property to give you more options; the rental company should also have its own commercial general liability insurance if someone gets hurt on its premises.

A final consideration to remember is your security when selecting a self-storage unit. Remember there is safety in numbers, so always bring a cell phone and somebody else with you when visiting your storage unit. These properties are usually deserted, and normally located in isolated areas out of earshot of others. Many have long interior hallways that may go days without a visitor.

Be safe, my friends.


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