The gray area concerning self storage insurance in Kentucky and Maryland is finally being addressed with the introduction of legislation to clarify the ability of self storage operators to offer tenant insurance to renters. Presently, self storage operators would have to obtain a license to distribute promotional information, such as brochures and flyers, on behalf of insurance companies. Bills proposed in both states would enable self storage business owners to act as agents of qualified insurance providers and offer limited-lines programs. These bills are similar to other measures currently being lobbied for by various industry associations and the national Self Storage Association.
House Bill 603 in Maryland states that its purpose is to require “the Maryland Insurance Commissioner to issue a limited lines license as a self–service storage agent to an owner or operator of a self–service storage facility who meets certain requirements…” The bill further goes on the describe what these requirements would be and how self storage facility owners would be able to obtain the limited lines license.
Self storage owners and operators would have to undergo a training program that would be sanctioned by the commissioner. After completing the training and obtaining the license, each person would be able to offer self storage insurance at multiple facilities in the state. If this bill ends up passing, it would go into effect on July 1 and self storage operators and employees would not need a license if they are simply handing out brochures and other promotional material.
House Bill 357 in Kentucky has similar stipulation to Maryland’s bill. It states as its purpose to “amend KRS 304.9-230 to create a self-storage space insurance limited line of authority for an agent's license; create a new section of Subtitle 9 of KRS Chapter 304 to define terms relating to self-service storage space insurance…” Once self storage employees satisfy similar requirements to the ones laid out in Maryland, they will then be able to offer tenant insurance as long as they clearly identify the insurance provider on related materials.
Both the Maryland and Kentucky bills include a provision that there customers need to be informed that the insurance coverage being provided may be a duplicate of what they already have. If tenant’s are required to have insurance as a conditional requirement, then they are able to satisfy that requirement by showing proof of additional coverage or purchasing the insurance offered by the self storage facility.
The proposition of these two bills comes less than a year after Oregon’s governor John Kitzhaber signed a tenant-insurance bill that allowed licensed self storage operators in the state to sell tenant insurance to customers. At least 14 other states were estimated to also be making progress towards updating self storage regulations.