Tenant Insurance Plans vs Tenant Protection Plans
Equipping your storage facility with the security features to fit your tenants’ needs is only half the battle. It’s equally important to protect yourself and their belongings with insurance and/or protection plans and explain to your tenants that the items they store in your facility are not automatically insured.
Keep reading to learn more about the pros and cons of tenant insurance and protection plans and how to determine which option is right for you.
Tenant Insurance Plans
Tenant insurance plans are provided by a third party and often available through homeowners or renter’s insurance plans. If you’re a storage facility owner, it’s always a good idea to recommend that they speak to their insurance agent about an insurance policy for their unit. If the tenant’s insurance doesn’t offer policies for storage units, it’s a good idea to have inexpensive recommendations on-hand to provide to your tenants.
Some self-storage owners offer tenants the opportunity to add on insurance plans as part of their rent. This can financially benefit the owner, while offering the tenant peace of mind. Other self-storage owners would rather focus on managing their self-storage facility and not be involved with the insurance process.
Tenant Protection Plans
Licensing is the largest difference between protection plans and insurance policies. If you offer a tenant protection plan, you can offer similar protections as insurance without being licensed. Offering these protection plans eliminates the insurance company as the third party and makes the storage facility owner liable for the loss/damage of the tenants belongings.
Some storage owners offer supplemental plans to protect their tenants from what insurance doesn’t cover. Selling a self-storage protection plan and/or making it mandatory for your tenants not only protects them, but also generates revenue for the storage facility owner.
Which is right for you?
Choosing the option that’s right for you depends on your state’s regulations and your preference. Some storage owners want to focus solely on running an efficient self-storage facility and leave the insurance policies to a third party. On the other hand, an owner/operator might want to consider offering protection plans as an extra revenue source.
Whichever route you choose, make sure to do your research on your state’s requirements and consider what option is in the best interest of your business and your tenants.
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