Whether you’re decluttering your home or need temporary space due to a remodel or a move, getting a storage unit can be a big help. Storage units are a great way to keep some of your belongings away from your home on a short- or long-term basis.
But don’t forget that once your personal property is away from your home, you might have to adjust your home insurance coverage to make sure your items are protected if you have a loss.
Does homeowners insurance cover your items in a storage unit?
Items in a storage unit are not in your home, but your homeowners insurance may still provide coverage for them while they’re in a storage unit.
The contents of your home (e.g., clothes, appliances, electronics, furniture, etc.) are protected under the personal property coverage in your home insurance policy. Typically, this means that you may be reimbursed for damaged or destroyed personal property, up to the coverage limits outlined in your policy, if they’re damaged by a covered peril.
What counts as a covered peril? That depends on your policy, but common ones include events like:
Your personal property coverage may also protect your belongings even while they’re not actually located inside of your home. Homeowners policies usually have an off-premises clause that creates coverage for items stored away from your primary residence.
But you should note that the off-premises property coverage within your home insurance policy might not be sufficient when you put personal items in storage. You’ll want to carefully review your policy before you move your items to a storage unit to make sure you have adequate protection.
When do you need extra home insurance for your storage unit?
Items in a storage unit are typically covered by the off-premises personal property coverage in your homeowners policy. However, there are situations where storing items away from your home means you need more coverage.
To decide if you need additional storage insurance, you want to think about:
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The risks your homeowners policy covers.
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Your personal property coverage limits.
Every type of home insurance policy covers certain risks, or perils, but no policy covers all of them. Your policy might specifically list the perils it covers, or it may be an open-perils policy that protects against risks not specifically excluded in the policy language.
A quick check of your policy can tell you what perils your policy covers. If you discover that your home insurance doesn’t cover some of the risks you’re concerned about when you move your property into storage, then you may want to talk to your agent.
Your personal property coverage also has a limit, which is the maximum amount your insurance company pays to help repair or replace your belongings after a covered loss. The coverage limit on personal property coverage is usually up to 50% of your dwelling coverage limit. (But again – check your policy! Your personal property coverage limit should be listed on the declarations page.)
While your off-premises items are likely protected for the same perils when they’re in storage as they are in your home, many homeowners policies have lower limits for off-premises personal property. This is commonly around 10% of the total personal property coverage limit.
Depending on what you’ve got in your storage unit, this could be inadequate. For example, let’s say your policy provides $95,000 in personal property coverage. That means the coverage for off-premises belongings may be only $9,500.
Your policy documents should outline the limits of your off-premises coverage.
How to increase your self-storage insurance
You have options if the value of the items in your storage unit is greater than the off-premises coverage provided by your home insurance, such as:
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Increasing your coverage limits. If your off-premises coverage is simply a percentage of your personal property coverage, consider increasing your overall personal property coverage limit (resulting in a higher limit for your off-premises coverage). Keep in mind that this will cause your overall insurance premium to go up.
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Add coverage for your high-value items. If you’ve got valuable items like art, jewelry, or antiques in a storage unit, look into adding scheduled personal property rider onto your policy. It increases coverage limits for individual items or categories of items.
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Buy self-storage insurance from the storage facility. Some storage facilities offer self-storage insurance that specifically protects your belongings in the storage unit.
You may find yourself pursuing several of these options at once in order to get the best protection for your stored items.
What about storage insurance from the storage rental facility?
Many self-storage facilities offer insurance for property stored in their units. Some even require that you have insurance coverage, whether it's from your own homeowners insurance, a policy that they can sell you directly, or a third-party provider that they recommend.
Storage insurance usually has a coverage limit and monthly premiums just like your other insurance policies. But the list of covered perils may be limited and it may be more costly relative to the property coverage that comes with your standard homeowners insurance.
Storage insurance typically covers damage or loss due to the following:
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Fire.
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Wind.
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Hurricane.
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Tornado.
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Water damage (not caused by flood).
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Hail.
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Lightning.
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Smoke.
Storage insurance typically excludes coverage for damage caused by flooding, mold and mildew, vermin, earthquake, and war.
The last word on insurance for self-storage
You can’t eliminate all the risks that come with keeping your items in a storage unit. But when it comes to insuring your possessions, you’re probably better off using the coverage provided by your homeowners insurance for the best protection. Increasing your personal property limits increases your coverage across the board, including the coverage for your off-premises belongings. And you can cover any high-value items with a special endorsement or rider.
Perhaps the most important point is that you want to take care in choosing your storage facility. Make sure your unit is climate controlled, clean, well-maintained, and well-lit with 24-hour video surveillance and controlled access.
It’s also a great idea to take an inventory of the items that you’re putting in storage. This is a simple way to keep track of what you’ve got and where it is. An inventory can also help you determine the value of the items in the storage unit so you can make sure you’ve got adequate insurance coverage.
