As a storage facility owner, ensuring the safety and security of your tenants' belongings is a top priority. But when it comes to selecting between tenant protection and tenant insurance, determining the ideal fit for your business can be a nuanced decision. Let’s explore the key distinctions between these options to help you navigate the landscape effectively, including the unique advantages offered by White Label Storage.
One significant contrast between tenant protection and tenant insurance lies in licensing requirements. Offering tenant insurance mandates that individuals involved, including store owners or managers, hold a valid insurance agent license in each state of operation. This necessitates obtaining licenses across multiple jurisdictions for facilities spanning different regions. In contrast, with proper structuring by a reputable provider, tenant protection can avoid licensing mandates and operate without being confined by insurance regulations in numerous states, providing greater operational flexibility.
Another crucial aspect to consider is the flexibility in rate adjustments. Tenant insurance rates and commissions are subject to stringent state insurance guidelines, necessitating formal approval for any adjustments. Protection plans, in many states, are not bound by these stringent requirements, allowing for more flexibility to modify rates as long as they do not violate public policy.
When assessing tenant protection versus insurance, it’s crucial to analyze the revenue-sharing potential. While both options mitigate claims liability and cover property damage caused by tenants, the revenue share can vary significantly. Tenant insurance typically offers approximately 25-40% revenue share to the store owner, a figure mirrored by basic tenant protection plans. However, specialized protection plans, like those offered by White Label Storage, are tailored to optimize benefits for both store owners and tenants, offering industry-leading revenue shares of up to 70% - 75%.
An often-overlooked downside of tenant protection plans lies in the inherent risk posed to storage facility owners. Unlike traditional insurance, where the insurer directly engages with the customer in the event of a claim, tenant protection places the facility owner or operator at the forefront of any claims process. Consequently, the owner is reliant on the tenant protection provider to fulfill its obligations, preventing the owner from facing any liability. Risk is transferred in two phases: Tenant risk is first transferred to the storage company, which then further transfers the risk to the insurance carrier via a contractual liability insurance policy (CLIP).
A cornerstone of tenant protection is the contractual liability insurance policy (CLIP), which shifts the limited liability assumed by storage owners/operators to the protection provider. This arrangement ensures that the provider’s insurance carrier assumes the risk and manages claims resolution, streamlining the process for all parties involved. Therefore, partnering with reliable and established tenant protection providers with a CLIP in place is paramount.
What sets White Label Storage apart from many competitors in the industry is that we don’t take a cut from the tenant protection profit. For instance, if you sell tenant protection to your customers at $14 per month, you could potentially profit $10 from each sale. With 300 units at your facility, that equates to an additional revenue of $36,000 per year!
