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
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’