"INSURANCE ON CONTENTS IS THE RESPONSIBILITY OF TENANT"
"INSURANCE ON CONTENTS IS THE RESPONSIBILITY OF TENANT"
This statement appears prominently in bold face print at the bottom of a representative rental lease used by a mini (self) storage company. Other lessors of storage space include similar language in their leases.
Whether or not a lease is specific in this regard, self-storage space rental firms, in general, advise householders that the lessor's property insurance is limited to the building and that they should look to their homeowners policies for coverage of temporarily stored household furnishings and other personal property. With this in mind, and in light of the widespread building of new self-storage facilities and the growing demand for them, it is likely that insureds will be calling those who provide their homeowners insurance to confirm protection under their policies.
Coverage of homeowners policies, in general, applies to covered property anywhere in the world, subject to reasonable limitations. "Insured location" is defined to include "any part of a premises occasionally rented to an insured for other than business use." Thus, Section I coverage for loss of or damage to personal property and Section II coverage for personal liability apply at a self-storage facility. Questions may arise over the storage of certain types of personal property.
Especially significant is the fundamental exclusion under Coverage of "motor vehicles or all other motorized land conveyances," including their equipment and accessories. When the storage of automobiles is permitted (and they are a subject for which short-term shelter is sometimes sought), the lessee would be protected under his/her pertinent automobile physical damage and theft coverage during the storage period. It is notable that a homeowners policy does extend to "vehicles or conveyances not subject to motor vehicle registration which are . . . used to service an insured's residence; or designed for assisting the handicapped." Lawn mowers are a good example.
Perils covered are those applicable under Coverage at the residence premises described in the applicable homeowners policy. They are named perils in the vast majority of policies. Significant for the storage risk is the added peril under Additional Coverages identified as "collapse." Particularly significant where heavy items are stored in multilevel storage buildings, loss to contents caused by building collapse from specified causes is covered.
Special limits of liability applicable to Coverage must be noted. In particular, a specified limit ($1,000, $2,000, etc.) applies to watercraft, including their trailers, furnishings, equipment and outboard motors. They are often stored, especially when people move from one residence location to another.
Homeowners insureds who temporarily store property in self-storage facilities are well-served by their insurance counselors who recommend a written inventory of such property. An insured will be in a favorable position if, in the event of loss of or damage to stored property, good records can be produced which identify and substantiate values of the property.
The adjuster will furnish necessary loss reporting forms to an insured and will be helpful in their preparation. The adjuster's task and that of insureds is infinitely easier when an inventory has been prepared in advance of loss by insureds. A photo or video inventory of the property in a storage unit is valuable support for a claim and is becoming more practical today as more families own equipment which can be used for this purpose. Bills of sale and appraisals of property are important supporting documents.
The self-storage business is growing so rapidly that space lessees have a wide selection of available facilities. People seeking to use these facilities can minimize problems by making specific inquiries about safety and security issues. Questions are welcomed by individual self-storage firms and have been encouraged by the Self Service Storage Association. Pertinent inquiries would include:
* Is the construction fire resistant?
* Is the premises well lighted?
* What other security measures are taken?
* Do doors close properly? How are they locked?
* Is the roof in good repair with no sign of interior leaks?
* Is the storage of certain materials prohibited as a safety precaution?
Managers of most storage facilities are happy to show prospective lessees the grounds and interior of units, and to provide information about procedures and requirements.
Our focus has been on basic coverage provided under a homeowners policy for personal property on a named peril basis, noting special limits of liability for certain classes of property. Higher limits may have been made effective by endorsement for specified types, or certain items may have been scheduled under a homeowners scheduled property endorsement (or separate scheduled property policy).
Such higher limit protection extends to specified or scheduled items that are temporarily stored in self-storage facilities. In the case of scheduled property insurance, the scope of perils insured against is considerably expanded.
A space lessee can be assured of good care for his/her property in a well-built and managed facility, but the protection afforded by a homeowners policy and other personal insurance is reassuring. Tornadoes and destructive fires are no respecters of building design and good management.
This review was prompted by the total loss of a self-storage facility, allegedly caused by welding in the course of the addition of a second floor, and possibly fueled by a propane tank stored by a lessee. *
©COPYRIGHT: The Rough Notes Magazine, 1999