Self-Storage Tenant Protection Plans still feel somewhat “new” to many people, but did you know that they have been around since 2003? Tenant Protection Plans are an alternative to Tenant Insurance and typically give owners and operators more control. Since Tenant Protection Plans are not insurance, as decided by the California Supreme Court in Heckart v. A-1 Self Storage, they are not regulated by the Department of Insurance.
A Tenant Protection Plan is a contractual agreement between you (the owner or operator) and your tenant. The terms and conditions of your Protection Plan become part of your rental agreement, as an addendum. Since this is not insurance, you have the flexibility to amend your contract to better serve your tenants. Protection Plans can give you the ability to choose the limits you want to offer, and set your own pricing.
Think about a storage facility in New York City or Boston, then think about one in Hartford, CT or Springfield, MA. Do you think they charge the same rent? NO! So why would you charge the same amount for a Protection Plan in a large Metropolitan area as you would in a smaller city? This flexibility allows you to cater to the specific demographic of your customers.
Protection Plan language is also customizable. Since this is your contract with your tenant, you can amend what you do or do not cover, how your tenants report claims, delinquency provisions, lock requirements, and much more! Every program is a little different, so always remember to consult with your provider prior to making any changes.
Unfortunately, there are some common misconceptions as it relates to running a Tenant Protection Program at your storage facility. Some of the misconceptions include that they are not legal, some think they do not cover natural disasters (like wildfires or tornados), that they do not integrate with your management software, or are difficult to manage. These are all FALSE. Managing a Tenant Protection Program is simple, integrated, legal, and most of all protects your tenant’s belongings from the most common losses suffered at storage facilities while providing an additional source of revenue for the owner or operator.
The Protection Plan contracts you sell, are backed by an insurance company, through your provider, for a small fee. In most cases, Tenant Protection Programs give owners and operators more control, and often, higher profits. Deans & Homer has been in the Self-Storage industry since 1974 and providing Tenant Protection Programs since 2003. If you are considering selling Tenant Protection Plans at your storage facility, speak with an expert to see if it is right for you.
