Self-storage -does anyone have sale/ disposal/ lockout insurance?

Question

Trying to get this added to our umbrella policy but noone will provide this as a stand alone item.  We did manage to get the customer goods liability to $1MM which was advised upon by our prop management company.  Anyone have thoughts?

Jason Bott · Answer

@John Kim If that is the case you may not have any insurance coverage currently.

The sellers policy insures the building in regards to the sellers interest.  If they no longer own the property, there is a really good chance the policy will not pay them if they no longer own it.

If you try and file a claim they will reject it as you are not the Named Insured on the policy.

You can go back to the same insurance company. It needs to be rewritten ASAP with you as the owner. I would do this first thing in the morning.

Now that you do have to go out and find a new policy, hopefully you can find one with the coverage you are looking for.

Jason Bott · Answer

Great.  The term "Transfer" is not an official insurance term designating the rewriting of the policy so I wanted to make sure you had it right.

Best of luck with the new property.

Henry Clark · Answer

Something is wrong.

Don’t think you have Self Storage insurance.  Auction,sales, lockout coverage is standard coverage in specific Self Storage policies  Call Ponderosa Insurance.  Sorry BP won’t let me put phone number. All they do is Self Storage policies.  Also you need to offer your customers insurance.   This is more step you don’t get sued, since you offered them an insurance product.  Should be part of your rental contract.  They either buy or decline.  Check with your Self storage software company.  They usually offer insurance so it is integrated with the software system.  Otherwise you have to maintain another management system, which you and your customers don’t want to do.

You cannot insure customer goods, since you have no ownership interest. Either I’m hearing you wrong or you need a new property manager who does self Storage.

Call Ponderosa and talk with them.

Make sure you over insure to cover clean up cost.  Also make sure your personal property has enough coverage at your site

Good luck

Gerald Grinter · Answer

Hi John,

Unfortunately, getting this as a stand-a-lone coverage may be tough to find. Most companies and brokers will want to have both the umbrella and general liability policy to offer the sale/disposal endorsement.

Start with your broker who writes the general liability policy to see if they than add this endorsement. Feel free to give me a call if you'd like to talk more. I hope this information helps.

Best of luck. - Gerald

Peter Lee · Answer

@Henry Clark thanks for chiming in.  Going to double check everything you mentioned.  Cheers!

Jason Bott · Answer

John, when you say "decided to stick with the pre-existing policy", do you mean that no change to the policy was made when you took title to the property?

Peter Lee · Answer

@Jason Bott yes poorly worded.  Good to have experts such as yourself here!

Adam Zdunek · Answer

@Jason Bott

John I would also like to echo what Jason has stated. A common misconception for real estate investing insurance (residential to commercial) is the new investor can just “take over the old policy,” but can’t happen because that contract is with the prior owner.  We see it all the time where a company grandfathered in a certain type of risk (ie motels or apartment storage units) and no longer have the appetite to underwriter this type of risk anymore usually due to losses incurred from the risk category.

I would check with your current insurance agent to get it insured correctly based on your state.

Final thing they may or may not be able to put all your properties under one General Liability/Property Policy. Some reasons they might not be able to is your current mix of properties you own are apartments and don’t underwrite storage units properties.

It’s always best to check with your agent each time you purchase a new property.

Hope this helps.

Peter Lee · Answer

Thanks @Jason Bott the policy is under our name now its just the old policy that was transferred over.  Totally makes sense though would be a big risk if we didn't make the switch and thanks for reminding us.

Peter Lee · Answer

Hi Jason,

Yes we kept the old policy and it is still in place but hard to get that sale/ disposal/ lockout insurance separately

Self-storage -does anyone have sale/ disposal/ lockout insurance?

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