Comparison: Tenant Insurance vs. A Tenant Insurance Program

Tenant Insurance vs. a Tenant Insurance Program - If your initial response is “aren’t they same thing?” then you’ve come to the right place. Let’s begin by discussing risk. As a self-storage owner you have accepted “risk” in anticipation of a financial return. You may reduce risk via effective business practices, and in some cases transfer risk to others. Business and risk go hand in hand. Self-Storage Tenant Insurance and a good Tenant Insurance Program both affect risk, but do so in different ways.

Wouldn’t it be great if you could simply pay someone a fee, they would exercise on your behalf, and you would lose the weight/ be healthier? Where do I sign up? In this example, you would transfer the need to exercise to another in exchange for a fee. You benefit via lost weight and better health, the excercisor (just made that up) would receive payment. This is a silly example, but does help explain the concept of “transferring” risk. Risk is loosely defined as the chance or possibility of loss.

Transferring Risk is paying a fee to another so they will accept some of that party’s risk. This transaction is generally called Insurance. Self-Storage Tenant Insurance is a vehicle by which someone storing goods at their own risk pays a fee to an insurance company which agrees to accept some level of the storing party’s risk. Self-Storage Tenant Insurance is a transfer of risk product as it relates to a self-storage customer. Quite simply, Tenant Insurance directly benefits the storage customer and provides some benefit to the storage facility owner. But when Tenant Insurance is coupled with a good Tenant Insurance Program, the result is powerful.

A Self-Storage Tenant Insurance Program

Access to Tenant Insurance is essential for every self-storage facility, but it's only one piece of a “risk reduction” puzzle. While Tenant Insurance is a “transfer of risk” product that benefits the customer, a Tenant Insurance Program is a “risk reduction” approach uniquely implemented to benefit the self-storage owner. Among other things, a good Tenant Insurance program should involve a review of a storage facility’s insurance lease language, provide effective one-on-one manager training, work behind the scenes to make sure that all insurance compliance and legal requirements are being met, as well as provide access to a quality Tenant Insurance product. While Tenant Insurance is a product, a Tenant Insurance Program is an organized process that should be implemented and maintained by a partner who is looking out for a facility owner’s best interests.

Article Contributions by: Rob Thompkins - VP of Operations/Partner at StorSmart Insurance Company

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