HOMEOWNERS INSURANCE MAY PROVIDE OFF-PREMISES PROTECTION, BUT POLICY LIMITS DIFFER, SAYS I.I.I.
Whether
you are downsizing to a smaller home, safeguarding heirlooms after a death in
the family or just cannot let go of those old mementos, storage units can
provide a useful solution for dealing with extra belongings. While storage
units may be the answer to de-cluttering your home, adequate insurance coverage
is the answer to protecting your belongings, according to the Insurance Information
Institute (I.I.I.).
“If an item is valuable enough that you are
willing to pay for storing it, the item should be financially protected with
the proper amount and type of insurance,” said Loretta
Worters, vice president for the I.I.I. “Even in the best managed storage
facilities, theft, fire and other disasters can and do occur. That’s why before
signing a rental agreement, it is important to find out what types of losses
will be covered by the storage facility and whether supplemental insurance may
be needed.”
The Self Storage Association notes that one
out of every 10 households in the U.S. currently rents some kind of storage
unit, including portable on demand storage (PODS).
Most storage facilities require that you
maintain insurance for the full replacement cost of the contents of your
storage room and ask to see a copy of your homeowners or renters policy. One
way to satisfy your insurance obligation is by purchasing insurance through the
storage facility. However, most storage facilities limit the value of property
that can be stored in a unit, basing it on the size and the amount of your rent
(usually up to about $20,000). If your property is worth more than the assigned
amount, some storage facilities will allow you to increase the assigned value
of the property in your unit. There are also exclusions including art,
antiques, jewelry, furs, watches, money, securities and other documents of
value. Be sure to check your homeowners or renters insurance policies
first to determine whether your contents may already be covered.
Standard homeowners and renters insurance
policies that include off-premises protection provide coverage for property in
storage facilities from theft and damage from fires, tornadoes and other
disasters listed in the policy. Much like storage facility insurance,
homeowners and renters policies do not cover damage caused by flooding, earthquakes,
mold and mildew, vermin or poor maintenance. Some insurers may limit the
off-premises coverage for personal possessions to 10 percent of the overall
amount of homeowners insurance you have. Other insurers may offer higher
coverage limits for personal possessions stored off-premises, so check
with your insurance agent at MIM before renting a storage unit. Also
keep in mind that insurance through your home or renters policy will be more
comprehensive than storage facility insurance and is regulated by your state
insurance department.
If you intend to store valuable property such
as art, antiques, jewelry or furs, there may be dollar restrictions under your
standard homeowners or renters insurance policy for theft. Ask your insurance
professional about adding a floater or endorsement to your policy in order to
fully cover these items. There are also specialized storage facilities
available for these types of items, as they often need to be kept at specific
temperature and humidity levels. Small items such as jewelry can also be kept
in a bank safe deposit box; insurers will generally charge less to cover an
item stored at a bank.
One of the best ways to substantiate the value
of your personal property is to create a detailed home inventory of all your
possessions, including those in storage. If your property is stolen or damaged,
an inventory can help speed the claims process and substantiate your loss. It
will also help you determine how much insurance to buy to adequately protect
your possessions.
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