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Got a storage unit? Make sure it’s properly insured

Aug 07, 2009 | | Comments Comments Off

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Creative Commons License photo credit: Night Owl City

One of the biggest mistakes people make when they decide to store their extra stuff in a storage unit: They assume that their belongings are insured by the facility.

Nope. The storage facility has nothing to do with insurance, according to the Insurance Information Institute. It simply provides a place to stow your belongings.

Here are few things to consider if you’re going to stash your belongings in one of these units:

Do you really need to do this? You’re essentially paying rent on belongings you aren’t using. And if you aren’t using them, perhaps it’s time to get rid of them. Storing stuff temporarily while you’re moving is one thing. But long term? Maybe it’s time to “release” some of your items via a yard sale or charitable donation so that someone else can get some use out of them.

Check with your insurance company. If you own a home, your homeowner’s policy might cover items that are being stored, but then again, it might not. If you are a renter and have renters insurance, the same applies. Call your insurance company and ask if your items that are being stored are covered in your policy.

What some policies cover – and don’t. Most policies that include protection for storage provide coverage from theft and damage from fires, tornadoes and a few other disasters listed in the policy, says the Insurance Information Institute, a nonprofit group supported by the insurance industry. Most policies will not cover damage from flooding, earthquakes, mold and mildew, vermin (rats, termites, etc.) or poor maintenance. Some insurers may limit the amount of coverage to 10 percent of the amount of insurance you have on your overall personal possessions for items stolen or damaged away from home. Other insurers may offer higher limits.

Consider the type of insurance you need. Personal possessions can be covered on either an actual cash value or a replacement cost basis. An actual cash value policy pays only the depreciated value of an item.  A replacement cost policy would pay to replace the item at what it would cost to purchase it at the time of loss. Clearly, replacement cost is the way to go, especially since these policies generally run only about 10 percent more than actual cash value policies.

Ask about adding a “floater’’ or endorsement to your policy. If you’re storing really valuable property such as artwork, antiques, jewelry, furs etc., there might be dollar restriction on your standard policy. As your insurer about adding a floater or endorsement to your policy to make sure you’re fully covered on these items.

Don’t forget to make an inventory. This is probably one of the easiest things you can do.  Take photos, record purchase prices, serial numbers, appraisal forms and sales receipts. If your property is lost or stolen, an inventory can help you speed the claims process and substantiate your loss. It also helps you figure out how much insurance you really need.  (The Insurance Information Institute offers a free, online software program called “Know Your Stuff” to help you document your items. CLICK HERE to check it out.)

For more tips, check out some of my previous blog entries:

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