While self storage insurance is mandatory for tenants, owners and operators are not required to provide it. Most renters either buy a separate policy or check to see if they are covered for damages under their homeowners’ or renters’ insurance policies. Now, MiniCo Insurance Agency, a member of the Aran Insurance Services Group, is introducing a new tenant insurance system that will allow self storage operators to share in the profit when they offer it to customers.
Under this new business model, self storage operators will directly own their independently operated insurance solutions, as well as receive support from MiniCo. This support includes risk analysis, expert claims management and staff training.
According to a press release issued by the company, John LaCava, President and CEO of Aran Insurance Services Group, said, “MiniCo’s partnership with Charter Atlantic Insurance Company brings individual captive insurance solutions to self-storage business owners – another example of our dedication to creating innovative programs and services for the self-storage industry.”
MiniCo President and CEO Mike Schofield added, “The combined expertise of MiniCo and Charter Atlantic, with underwriting by our “A” rated insurance partner, offers an outstanding opportunity to self-storage operators looking to expand their businesses and maximize their revenue.”
However, self storage operators who are considering this new venture should be fully aware of the possible risks involved. In 2014, a Florida man brought a lawsuit against Public Storage claiming that he was deceived by the company’s insurance policies. Colin Bowe alleged that Public Storage failed to disclose that it receives some of the profit from the self storage insurance that it provides to tenants, which resulted in a large amount of profit and kickbacks at the expense of its customers. In the lawsuit filed in an Miami court, Bowe was seeking restitution from Public Storage’s insurance sales, to the tune of several million dollars.
In such a litigious society, self storage operators who join forces with MiniCo should ensure that the terms and conditions of their agreement are fully outlined to customers as well. Full disclosure should be made so that tenants know that the self storage facility is not only making a profit from the rent, but from the insurance premiums as well.