Storage Insurance or Tenant Protection Plan: What’s The Difference?

According to the Self-Storage Association, one out of every 10 households in the U.S. rents a  self storage unit. That means 10.8 million Americans are comfortable that their possessions are safe, secure and well protected at their local self storage facility. They’ve taken the time to choose the right self storage facility for their possessions, and they know that the majority of self storage businesses have cutting edge security. Video monitoring, electronic gates, keypad access, and even bluetooth enabled keyless entry keep their belongings safe and protected.  

Despite these precautions, insurance is required at most facilities to mitigate risk and cover losses. A growing number of self storage businesses have added a tenant protection plan as another layer of protection.  A tenant protection plan covers certain losses not covered by insurance.

Storage Insurance vs. Tenant Protection Plan

The National Association of Insurance Commissioners states that even though items in a storage unit are not physically in your home, your homeowner’s policy may help protect those items from certain hazards.  Homeowners/renters insurance typically includes personal property coverage, from certain risks, for clothing, appliances, electronics, and furniture. These items, however, are covered only up to the coverage limits on your policy.

Tenants who depend on the “off-premises” coverage of their homeowners or renters insurance to pay for any damages to items in their storage unit may be disappointed in the event of loss; “off premises” coverage is usually capped at a certain rate.

Be sure to check with your insurance agency to verify exactly how much coverage you will have for “off-premises” items.  

Homeowners/renters insurance covers the contents of a self storage unit only up to a certain limit.

• According to the Insurance Information Institute, coverage for items in a storage unit is generally provided by the “off-premises” personal property coverage in a homeowner’s policy. Typically covered are fire, lightning, theft, and vandalism.
• “Off-premises” personal property usually has a coverage limit of up to 50% of the policy’s dwelling coverage limit. Some homeowner’s policies have even lower limits for property located away from your home. For example, if you have $75,000 coverage on your personal property under your homeowner’s policy, coverage for “off-premises” property may be capped as low as 10% or $7,500.
• Renters insurance generally covers items in a self-storage unit for up to 10% of your policy limits.  

What is covered by self storage insurance?

Buying self-storage insurance will usually give you coverage for damages to your possessions, less your deductible, due to loss from:

• Fire
• Theft
• Hurricane
• Tornado
• Wind
• Hail
• Lightning
• Leaking Water (excluding flooding)
• Smoke
• Earthquake

A tenant protection plan offers advantages that you don’t see in conventional insurance coverage.

How does a tenant protection plan work?

A tenant protection plan is a contractual agreement between the facility and the tenant, with the facility assuming limited responsibility for the tenant’s belongings while they are stored in a locked unit. In other words, operators agree to pay customers for damages to belongings up to a specified dollar amount.

Customers will be reimbursed at replacement cost for their damaged or stolen property (clothing and household linens are subject to depreciation). Protection plan fees are conveniently collected with the monthly rent, and there are no deductibles.

Losses from the following are covered:

• Theft due to forcible entry
• Fire, smoke, lightning, or explosion
• Windstorms
• Water damage from a leaking roof or broken pipe (up to protection plan limits)
• Furs, antiques, works of art, and consumer electronics

Certain protection plans also cover:

• Cars, boats, jet skis, RVs, motorcycles, and quads stored inside units
• Document re-creation costs (up to protection plan limits)
• Moth, insect, rodent, or vermin damage up to $500
• Jewelry up to $500

Tenant protection plans do not cover:

• Loss due to flood damage
• Damage caused from dropping or moving property in and out of a storage room
• An improperly packed room resulting in damaged belongings
• Mysterious disappearance
• Any property stored outside a locked storage room, including RV’s, cars, boats

With a tenant protection plan, you’re guaranteed an extra layer of safety for your possessions.

Before you make a decision on any insurance or protection plan to cover your losses, think carefully about the monetary and the sentimental value of your possessions. Be sure to consult your insurance agent, and discuss your options with the manager of the facility where you choose to store your belongings.