The Death of Tenant Insurance!
After 43 years, IT’s going the way of the Dinosaur!
It was originally created as a countertop ‘mail-in’ insurance brochure for customer convenience. It provided coverage between the tenant and a licensed insurance company. This product was made for the tenant to feel comfortable that the facility had passed enough underwriting standards to be able to offer insurance coverage at their site. The ‘mail in’ product was fairly high priced and sometimes offered limited coverages – for example, 50% burglary – but was handled by reputable companies who paid claims fairly.
There weren’t many sales as the average participation was around 2%.
The main reasons the product failed were simply money and greed.
Through various devices such as limited insurance licenses, insurance providers began to pay commissions to Self-Storage owner/operators to sell their tenant insurance policies.
At first, commissions were paid at 25%. Then commissions escalated – 40, 50 all the way to 75% and even higher. These huge commissions brought attention from State Insurance commissioners and professional insurance agents who were earning 12-15% commissions.
As a result, claim complaints began to pile up, corners were cut, fines were levied by states and the end was near.
The bottom line is, it is an insurance product.
Have you ever been sold an insurance policy by an insurance agent who doesn’t have an insurance license?
Tenant insurance works best in its original role, sitting on your counter as a customer convenience to be bought and sold between a licensed insurance company or agent and the customer.
See our latest ad…
The ad is located in the new Inside Self-Storage (ISS) August 2017 magazine edition entitled “2017 Buyer’s Guide”, on page 60 (Inside the cover/last page on the left-hand side).
“Rest In Peace Tenant Insurance!”
About the author
After decades of working separately in self-storage insurance and marketing, Harry Sleighel, has created a tenant protection plan for the self-storage industry: Tenant Property Protection, with a focus on marketing, training, and advertising. For more or to contact Harry, reach him at linkedin.com/in/harrysleighel.