By Chris Kiddey, National Claims Technical Specialist
We’ve had some queries recently about how home contents might be covered when you’re away from home and storing them long-term, particularly in rented storage units.
You might think that it would be reasonable to expect you could put your belongings in a secure storage unit and then come back a year later to find them exactly as you left them. Unfortunately, that’s not always the case.
Here’s what we hope is some helpful Q & A on this issue, based on real-life enquiries we’ve received:
Q: I’m selling my house and taking a long trip before finding a new one, so I’m putting some contents into storage. Will my usual contents insurance cover them there?
A: Probably not. The typical contents policy covers your personal possessions only while they are at your house or temporarily removed from there. Once possessions have been moved away and won’t return, they’re neither at the house nor temporarily removed. Furthermore, many policies have strict limitations or exclusions related to storage, transporting (e.g. moving house) and certain other things.
Here’s what AMI’s Advanced Contents policy has to say:
“There is no cover when household contents are:
i. permanently removed from your house, or
ii. in transit during permanent removal (except for the cover provided under ‘Transit cover’), or
iii. removed from your house for sale or exhibition, whether permanently or temporarily, or
iv. removed from your house for storage, whether permanently or temporarily”
Q: OK, that’s pretty clear. But why such limits?
A: It’s all about risk. When your contents are all within your four walls, generally speaking they’re pretty safe. Sure, burglaries and fires and other things happen – that’s why you have insurance after all – but the big losses are actually pretty rare and there are fewer ‘unknowns’. When your possessions are in storage, by definition you don’t get to personally use and care for them in the same way.
Q: So in my situation, what can I do?
A: You can look for a specific ‘Contents in Storage’ policy, and sometimes your usual contents insurer will amend your existing policy to provide some cover.
If you are using a professional carrying or moving company, talk to them about what insurance they may have available for transit and storage.
Q: Sorted! So I can just call my insurer and get them to add an extension?
A: Sorry, not quite. Back to that comment about risk: although you can get additional cover, it may come at a price and it may not cover as many kinds of damage as your usual contents cover.
Let’s take a look at a typical ‘Contents in Storage’ endorsement:
Q: That looks different from my usual contents policy.
A: It is. It’s often called a ‘Defined Perils’ policy. The most important thing to note is that it is only these listed ‘perils’ that are covered, nothing else. So, for example, there’s no cover for any kind of vehicle impact damage or damage caused by unexplained disappearances – only what you see on the list.
Remember too that gradual damage and damage by rodents are normal contents policy exclusions and this uninsured damage can occur undetected in some storage situations.
Q: That’s definitely less generous than the cover for my contents at home!
A: Yes. Make no mistake: we want to sell insurance, and to do that we try to make it as generous as reasonable. But we also need to keep it affordable – so we can’t cover everything. Again, it’s about risk. You probably can find a policy with broader cover contents in storage – but you’ll always pay for what you get.
Q: OK, what about the storage company? Can I expect them to provide their own insurance cover?
A: Possibly, although it may be a similar type of policy and may be at a similar cost.
Q: What about if I think the storage company is actually responsible for damage to my contents?
A: Good question. When you professionally care for someone’s contents you’re known as a bailee, and a bailee has a duty of care to ensure that no harm comes to the possessions in their care, and so if they do come to harm then that bailee *might* be held financially responsible for that damage. They might even be able to claim against their own liability insurance policy for damage to other people’s property.
Q: So… I don’t need my own cover after all?
A: Many companies that provide storage facilities may not be a bailee as they simply offer you the ability to store items in your designated locker. For a storage company that is a bailee, just because your items are in their care doesn’t mean they are automatically to blame if there’s loss or damage. Looking back to the policy clause above, you would have a hard time blaming a storage company for damage caused by a lightning strike, for example.
Q: I get it. Insurance is important but it just might not be able to cover everything all the time.
A: That’s right. The best you can do is try to apply care and common sense. Here are some tips to remember:
- Ensure that your contents are safely and securely packed and that you have a good record of what’s being stored.
- If you have very valuable small items such as jewellery, or items of great sentimental value, consider a safety deposit box instead of putting them in general storage.
- Think about the transit and storage risks and what your policy and the contracts offered to you cover and what they don’t.
- Use a reputable storage company. Your insurer may be able to make a recommendation.
- Make sure you have a contract with the storage company and that you’re happy with what’s in the fine print.
- If anything goes wrong, remember that you have the protections of the Consumer Guarantees Act which specifies that goods and services must be fit for purpose.
- Shop around and get the best insurance cover you feel you can afford – but don’t forget that not everything can be covered.
… and perhaps most importantly, if you have questions about your insurance cover, pick up the phone and give us a call!