Self-stor­age cus­tomers boxed in over in­sur­ance poli­cies

Some stor­age firms ban cus­tomers from shopping around for cover and over­charge them for their poli­cies, finds Sam Barker

The Sunday Telegraph - Money & Business - - Front Page -

Cus­tomers who buy con­tents in­sur­ance through their self-stor­age firm are rou­tinely over­pay­ing by an av­er­age of three times more than they could get else­where. Tele­graph Money has seen ex­am­ples where cus­tomers were charged up to seven times as much, or told they could not shop around for a bet­ter deal, and in some cases were charged more for in­sur­ance than for the stor­age it­self.

Bri­tain is a na­tion of self-stor­ers. Al­most half, or 1,430, of the self­s­tor­age sites in Europe are in this coun­try, ac­cord­ing to the Self Stor­age As­so­ci­a­tion UK (SSAUK).

Con­tents in­sur­ance is nor­mally com­pul­sory when goods are placed in a self-stor­age unit. Some house­hold con­tents poli­cies ex­tend to cover this, but most do not.

A spokesman for the As­so­ci­a­tion of Bri­tish In­sur­ers (ABI) said: “Not all house­hold in­sur­ance will cover you while your pos­ses­sions are in a self-stor­age fa­cil­ity, par­tic­u­larly if they are be­ing stored for an ex­tended pe­riod of time.”

Peo­ple whose home in­sur­ance does not cover self-stor­age can ei­ther buy a pol­icy through their stor­age com­pany or go to a sep­a­rate spe­cial­ist in­surer or bro­ker.

But if you choose to rely on your stor­age com­pany for cover, be pre­pared to pay above the odds. Self-stor­age firms nor­mally have a pre­ferred in­surer or bro­ker that pro­vides the cover, to which the stor­age busi­ness can add com­mis­sion.

The five largest self-stor­age com­pa­nies by num­ber of branches are Safe­store, Big Yel­low Self Stor­age, Ac­cess Self Stor­age, Shur­gard Self­s­tor­age and Lok’nstore.

Re­search by Proin­sight, a mys­tery shopping com­pany, seen ex­clu­sively by Tele­graph Money, found that all five firms quoted in­sur­ance costs that were higher than cus­tomers could get else­where. A Safe­store branch in Liver­pool quoted £644.80 for a pol­icy cov­er­ing £16,000 of goods for six months. The same risk could be in­sured from £90.30 to £287.04 else­where.

A Big Yel­low branch in Glouces­ter quoted £80 for in­sur­ance, more than the stor­age costs of £69 for the one-month pe­riod quoted.

The same in­sur­ance was found for £38.40 else­where.

A spokesman for Safe­store said: “We can­not com­ment on in­di­vid­ual quotes, or how they com­pare in terms of the level of cover or ex­cess. Our in­sur­ance prod­ucts of­fer cover tai­lored for stor­age re­quire­ments, in­sur­ing for full as-new re­place­ment cost of goods and with a low ex­cess.

“In all cases cus­tomers are free to take out an equiv­a­lent, ap­pro­pri­ate in­sur­ance prod­uct from their provider of choice.”

A Big Yel­low spokesman said the firm would let the Self Stor­age As­so­ci­a­tion UK com­ment on its be­half.

Proin­sight mys­tery shopped at 166 self-stor­age branches, cov­er­ing 70 firms in to­tal. In all in­stances bar one, cheaper in­sur­ance op­tions were found else­where.

Richard Han­nan of Sure­wise, the in­surer that com­mis­sioned the mys­tery shopping, said: “We were amazed to find that stor­age com­pa­nies were charg­ing an av­er­age of three times more for the same or very sim­i­lar poli­cies.

“Some of the prices that were be­ing charged were highly alarm­ing and in fact we strug­gled to find a sin­gle self-stor­age com­pany that was sell­ing in­sur­ance for less than their on­line com­peti­tors.”

While most self-stor­age firms will let cus­tomers buy cover else­where, some do not. Proin­sight found sev­eral ex­am­ples where the mys­tery shoppers were told they had to buy the in­sur­ance of­fered by the self-stor­age firm, even if the same pol­icy was avail­able else­where for less.

Pick­fords Self Stor­age in Cam­bridge said its in-house in­sur­ance was oblig­a­tory and quoted £147.16. Equiv­a­lent cover was found for £90 else­where.

A Pick­fords spokesman said: “The cus­tomer is at lib­erty to in­sure with an­other in­surer but must pro­duce ev­i­dence that they are in­sured at the time of sign­ing the agree­ment be­fore com­ing in to store [their goods].

“If it has been im­plied to your re­searcher that Pick­fords’ rec­om­mended in­sur­ance is manda­tory, this is not our stan­dard pol­icy and we will in­ves­ti­gate the mat­ter fur­ther with the lo­cal man­ager in Cam­bridge.”

Some self-stor­age firms bun­dle in­sur­ance with the cost of the stor­age, leav­ing cus­tomers with no way of know­ing if they could save money by tak­ing out in­sur­ance some­where else.

A branch of A&A Self-stor­age in Ken­tish Town, north Lon­don, told Proin­sight that its stor­age quote in­cluded in­sur­ance. The mys­tery shoppers were told that they were free to shop around for an­other in­sur­ance quote, but that the over­all stor­age cost would not be re­duced if they bought in­sur­ance else­where.

Dim­itri An­donov of A&A said this was not the com­pany’s nor­mal stance. He said: “If that was said, it would have been a mis­take on the part of the mem­ber of staff who said it, as that is not our pol­icy.” He said cus­tomers were free to buy in­sur­ance from other firms and the over­all stor­age cost would be re­duced.

A poll con­ducted for Tele­graph

Money by Con­sumer In­tel­li­gence, a data an­a­lyt­ics firm, found that one in six stor­age cus­tomers felt pres­sured into buy­ing in­sur­ance through their self-stor­age provider.

Of 558 re­spon­dents, 13pc said they didn’t know that they could get al­ter­na­tive cover, while 16pc were too ap­a­thetic to shop around. Al­most a third of peo­ple asked said they thought their pol­icy was “very” or “some­what” ex­pen­sive.

Ren­nie Schafer of the SSAUK said in­sur­ance might cost more when bought with stor­age be­cause it of­fered bet­ter cover than cheaper poli­cies found else­where. For ex­am­ple, third-party poli­cies might not pay for wa­ter dam­age, or might not re­place old goods with new ones.

He said: “If you go on­line you might find that the cov­er­age they give you is not the same as you get from a self-stor­age op­er­a­tor. If you are sug­gest­ing to peo­ple that they shop around for in­sur­ance, that’s fine, but make sure they are com­par­ing like with like.”

Mr Han­nan said the third-party quotes ob­tained by the mys­tery shoppers were com­pa­ra­ble with those of­fered by the stor­age firms.

Ian Hughes of Con­sumer In­tel­li­gence said: “Pay­ing for in­sur­ance when you ar­range your stor­age might be the most con­ve­nient op­tion, but it isn’t al­ways the best value. My advice to peo­ple in this sit­u­a­tion is not to wait un­til they be­come a cap­tive au­di­ence.”

An ABI spokesman said spe­cial­ist in­sur­ers and bro­kers could pro­vide bet­ter deals, es­pe­cially if your stan­dard home con­tents in­sur­ance does not cover stor­age.

At the very least, he added, “shop around be­tween stor­age providers as each will have dif­fer­ent in­sur­ance poli­cies in place”.

‘We strug­gled to find a sin­gle self-stor­age firm sell­ing cheaper in­sur­ance poli­cies’

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