Individuals utilizing self-storage facilities are potentially overpaying for their insurance, with some paying up to nine times more than necessary, according to experts who highlight that customers could be losing hundreds of pounds annually due to exorbitant premiums.

There has been a boom in demand for self-storage units – with the number of sites offering the service up 16 per cent to 2,200 since 2020. 

Typically, contents insurance is not bundled within the rental contracts and is instead offered separately as an advantageous extra that the company suggests you should obtain.

A recent study conducted by the insurance brokerage Surewise revealed that customers are being charged £108 for six months of coverage worth £1,000 by self-storage providers, while comparable policies are accessible from competitors at just £11 for the same duration.

The research indicated that choosing an insurance option marketed by a self-storage company could result in spending £2,000 more over a year compared to alternative offers available elsewhere.

For instance, a storage facility in London quoted £1,159 to insure goods valued at £27,000 for half a year, equating to £193 per month. However, by exploring other options, the same coverage for six months could be secured for only £146.

Richard Hannan, chief executive of Surewise, says: ‘Customers are very likely to overpay. 

But there is no obligation to take out insurance through a self-storage company. There is nothing to stop you shopping around.’

Major providers often use their own brands to promote insurance provided by a third-party insurer, in a process known as white labelling. 

Notably, prominent provider Big Yellow partners with Axa Insurance for branding their insurance policies, whereas Safestore collaborates with Basil Fry & Company.

Jeff Salmon, founder of insurance claims management company Salmon Assessors, fears many people may feel tricked into taking out self-storage branded cover because they are not aware other options are available – and are less likely to question an offer if they sign up for renting storage space at the same time.

He says: ‘It can be an expensive mistake just signing along the dotted line. You should never sign up with the cover offered by a self-storage company without taking a deep breath and then looking around for other options.

‘If you are only using storage on a temporary basis – such as three months – you might even discover you are already covered by your existing home contents insurance provider.’

Salmon suggests that for long-term storage rentals an online broker service should be able to save you hundreds of pounds over a year. 

Specialists that can help with self-storage insurance cover include Surewise, Store Insure and Store And Insure.

But Salmon warns the cheapest deal is rarely the best option. He says: ‘Few people read the small print of their policies until it is far too late, and they are making a claim.

‘Make sure you check on the excess amount, as if a policy does not kick in until £1,000 you could be left out of pocket. 

‘But it is a false economy to try and save money by not taking out cover because if there is a disaster, such as a fire, it is vitally important your valuables are covered.’

You also need to check the storage company rules because if you break them then any claim could also be thrown out – no matter who is offering the cover.

Insurance is typically sold separately, and it is not included in the cost of self-storage – although it is usually mentioned when customers are signing up to rent a unit.

Surewise, which did a mystery shop of 135 self-storage sites in Britain to find out the insurance prices that they offer, points out that despite companies actively promoting their own insurance policies – and not mentioning other options – the self-storage providers are obliged to accept insurance certificates offered by competitors. 

However, they do not need to provide details of any commission received for promoting linked insurers.

Rennie Schafer, chief executive of the trade body Self-Storage Association UK, says: ‘It is a free market, and we just want to keep people informed. 

‘We strongly encourage all customers to take out insurance and our members offer realistic quotes that are competitively priced. 

‘It may be the case you can sometimes get cheaper third-party insurance elsewhere, but it is important to check the cover details and make sure it includes similar specifics, such as cover for flooding.

‘By dealing with a self-storage company’s own insurer, you may find the process runs more smoothly if there is ever a claim as you are dealing directly with one provider.’

A spokesman for Safestore says: ‘Our cover goes beyond typical home policies, offering broader protection against more risks and ensuring customers get the peace of mind they deserve. 

‘While taking cover through Safestore isn’t compulsory, it is a more efficient and cost-effective choice. Most customers opt for our policy at the point of sale, saving time and avoiding the hassle of arranging their own. ’

Big Yellow says: ‘All customers must either take out contents protection for their goods through our enhanced liability service or provide proof of insurance cover for goods in self-storage before they can store with us. 

‘If using your own insurance provider you will need to ask them to add an addendum to your policy to include the name and address of the store.’

Shurgard, which took over the Lok’nStore brand a year ago but is still running its outlets, was contacted for comment.