Mandatory tenant self storage insurance - worth it?

Question

Our prop management company doesn't have mandatory tenant insurance in place and we are looking to implement this as all our surrounding competition has this.  Curious to what kind of income those of you have sell insurance get.  Any other opinions on pros cons appreciated.

Henry Clark · Answer

@John Kim

$7.95 per month on $1,000 coverage.  We make about $2 on it.

Its not about your income.  Its not about your customers being insured.

Its about you not getting sued for theft or damage.

You have no insurable interest in the customers goods, thus you can't insure and collect.

By offering your customers insurance, you take away one of their avenues to come back at you.  "You offered them insurance".  If they have a claim, it is very hard for them to say "they" didn't insure and it is your fault.

Have on your contract they are signing off, they don't want insurance.  It needs to be part of the contract.

Also make sure the insurance is part of your Management software and not an independent coverage.  If independent then two software/data systems have to be maintained and they won't talk with each other.  Creates more work that will never be kept right between the two systems for payment management and history research.

Good luck.

Zach Quick · Answer

@John Kim look for a ‘tenant protection plan’ instead. Higher commission, no licenses.

Zach Quick · Answer

@John Kim if all your competitors are, yes it’s a no-brainer. Management company should give you an anticipation for what to expect commission wise.

Mike Barry · Answer

Yes

Peter Lee · Answer

@Zach Quick thanks for the tip!

Peter Lee · Answer

@Zach Quick Think I'll go around to competition and see what they typically offer.  Our management company told us typically the margin is 20-25% ish.  Plus there was an annual fee to be able to resell insurance.

Mandatory tenant self storage insurance - worth it?

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