CT Insurance Regulator Opposes Self-Storage Tenant Insurance Bill

The Connecticut Department of Insurance contested Senate Bill 1037 (SB 1037), which would have allowed self-storage operators in the state to sell renters insurance. The measure was introduced in February to the general assembly by the Insurance and Real Estate Committee and is similar to other industry laws that have been approved in 42 states. It is endorsed by the National Self Storage Association (SSA).

The state’s insurance regulator opposed the bill in part because it believed renters’ insurance was “complex” and should be sold only by “knowledgeable and qualified insurance professionals.” While the measure will require warehouse owners to obtain a license, it does not require formal education or proof of competence to sell coverage, according to the sources.

While SB 1037 would allow warehouse employees to sell policies under an owner’s license, the bill also exempts operators from license requirements if they are simply providing promotional materials to customers or are involved in premium collection or collecting payments, sources report.

“This combination of marketing and other types of activity can create confusion for consumers about the person or entity responsible for selling insurance,” the insurance department said in testimony to a recent public hearing. “In addition, this framework provides owners with responsibilities normally reserved for licensed manufacturers even without the protections afforded by regulatory oversight.”

Joe Doherty, SSA’s senior vice president and chief legal and legislative officer, argues that insurance agents are not interested in selling renters’ insurance policies because the premiums are relatively low. He also notes that the ability for standalone storage carriers to sell coverage to customers is a convenience.

If SB 1037 is approved in writing, the self-storage operator selling renter’s insurance must disclose to the customer that coverage can duplicate the coverage of an existing homeowner’s or renter’s policy. They are also prohibited from selling renters insurance as a condition for renting units.

If passed, the bill will go into effect on October 1.

Insurance Journal, Connecticut Regulator Against Letting Own Storage Businesses Sell Insurance to Tenants
Connecticut General Assembly, Senate Bill 1037

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