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The Benefits of a Tenant Protection Plan

Self storage tenants who depend on the “off-premises” coverage of their homeowners’ or renters’ insurance to pay for damages to items in their storage unit may be disappointed. “Off-premises” coverage is usually capped at a certain rate, meaning that you won’t be fully covered for your belongings. A tenant protection plan, on the other hand, offers advantages that you don’t see in insurance. To understand how a tenant protection plan works as opposed to insurance, read the following article.

When you decide to store your possessions in self storage, do you think about what might happen if you incur a loss? Will your homeowners’ or renters’ insurance coverage be sufficient, or do you need to buy storage insurance? There is an alternative to both that offers additional protection – a tenant protection plan.

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. Most of these facilities have cutting-edge security that includes video monitoring, electronic gates, keypad access, and even Bluetooth-enabled keyless entry.

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 is not insurance, but it covers certain losses not covered by insurance. 

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 “off-premises” coverage 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 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 agent to verify exactly how much coverage you will have for “off-premises” items.  

Homeowners’/Renters’ Insurance 

  • According to the Insurance Information Institute, items in a storage unit are generally covered by the “off-premises” personal property coverage in a homeowner’s policy. This coverage usually extends to only 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.   

Self Storage Insurance

Buying self-storage insurance will provide 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.

Tenant Protection Plan

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.

A tenant protection plan covers the following:

  • 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. 

Final Thoughts

Before you make a decision on any insurance or protection plan, carefully consider the monetary and sentimental value of your possessions. Discuss your options with your insurance agent as well as the manager of the facility so that you have the information to make an informed decision. In the event of an unforeseen occurrence, you’ll have peace of mind knowing that you and your valuables are financially protected.