What kind of insurance policy is needed to protect personal property or contents while it’s in storage? This was the question a friend of mine texted me the other day. She put her home on the market and received an excellent offer within a few days, however her new home won’t be finished for another couple of months.
In this case, my friend will need to store her personal property in a storage facility. Most home insurance policies provide for coverage of personal property off premises, usually 10% of the personal property coverage amount. However, since she will cancel her current policy on her existing home and won’t have a replacement policy on her new home until it’s finished, this is not an option for her. She does have two other options, get the insurance offered by the storage facility or find a policy that covers her property while in storage.
Storage Facility Insurance: Many storage facilities offer an insurance policy on items an individual may store there. It’s not a great policy. Like a moving policy, the amount of coverage is usually an amount per pound such as $0.60 to $0.80. That’s better than nothing, but is inadequate for heavy items such as a bed, sofa, piano, etc. Quite frankly, if there was a loss such as a fire or water leak, this type of policy will not be able to pay to replace a heavy item.
Storage Policy: One of my brokers does write a replacement cost policy for whatever is stored. We simply provide the amount of coverage needed and the length of time a person’s personal property will be stored. The cost is reasonable too. In this case, $300 to $400 for $80,000 to $120,000 in personal property for a 90-days.
While this option is more expensive than the cost per pound coverage offered by the storage facility, my friend’s personal property will be protected for its full value. In addition, the storage policy is available for storage facilities where you rent a room or locker and store the items yourself, put them in a storage pod, or the facility comes to your home, picks it up, and stores it for you.
This kind of policy is ideal for someone relocating to the area, or is building a new home that won’t be ready when they sell their house. What do you think? Share your comments, questions, or experiences with me on my Facebook, Google +, or LinkedIn pages. I’d love to hear from you!