Day 48: Tenant Insurance Programs Required Recommended or Revenue

Welcome to day 48 of the Boat and RV 100 Series. I am Joe Downs with Storage Moguls, and today I'm going to walk you through the 3 options every boat and RV operator has on tenant insurance and the one most operators are leaving on the table entirely. If you're looking for a place or a community that has resources like this, information like this, and talks about things like this, then you should probably join StorageMoguls.ai. We aren't just buying storage units or boat and RV facilities there. We're buying— we're becoming storage moguls. To us, a mogul is a sophisticated operator who's mastered the full arc from sourcing the deal to running it like a machine. We don't just buy, we acquire and we optimize. That's the discipline that turns a standard investment into an extra 6 figures of value. We specialize in taking people who've never even considered this asset class before all the way through the process from zero to owning and operating their first deal. There are no Stage gurus here. We're solopreneurs and couples actively closing financeable deals between $400,000 and $2 million. And we're doing the work right now. We're doing it together every day at storagemuggles.ai. You can start for free and move along at your own pace. But back to today, because in this vertical where the average stored vehicle is worth $50,000 or more, really more, tenant insurance is not a back office conversation. It's a deal daily operational reality and a revenue opportunity that most operators handle passively when they should be handling it deliberately. Here's the context that makes insurance different in this vertical compared to self-storage. A self-storage unit or tenant storing the— storing furniture and boxes has some financial exposure or something if something goes wrong, but it's manageable. A boat and RV tenant storing a $180,000 Class A motorhome or a $90,000 center console boat It was a very different level of exposure. And here's the thing most operators don't realize. The standard homeowner's insurance policy typically does not cover boats or RVs while they're in an offsite storage. It might cover the vehicle at home. It might cover it while it's in transit. But a boat sitting in a storage facility for 5 months is often outside the scope of a standard homeowner's policy. Most tenants don't know this. The ones who find out the hard way are the ones who had something happen to their vehicle and discovered at the worst possible moment that their policy didn't cover it. The operator who tells a tenant this before something happens builds a level of trust that's very difficult to displace. That educational conversation— your homeowner's policy probably doesn't cover this, here's what it does, uh, or here's what it does— That's one of the highest value things you can do in the leasing process, and it sets up the insurance conversation that follows. There's 3 options for how you handle tenant insurance at your facility. Option 1, you can just ask for proof. Every tenant must— and you require it— every tenant must provide a certificate of insurance for their marine or from their marine or RV policy before they can move in. And you need to verify it annually. And it needs to make sure it covers their vehicle or vessel while it's in storage. This protects the tenant, limits your liability and damage disputes, and signals to the prospective tenants that you're running a professional operation that cares about protecting what you're storing. Option 2, offer a facility-sponsored insurance program. That's— this is the revenue option. You partner with an insurance provider who offers tenant coverage that can be added to the lease at move-in. The tenant pays a premium monthly, just— and they can pay it alongside their, their monthly rental rate. It's typically going to be another $10 to $30 depending on the vehicle value and their coverage tier. And you're going to earn a commission on or a revenue share on every policy. Option 3, no requirement, no program. Tenants are on their own. And this is the path of least resistance, but it's also the one that creates the most exposure for the tenant and for you when something goes wrong. My recommendation, option 1 or option 2, really both require proof of coverage and offer facility-sponsored program as an alternative for tenants who don't have their own policy or whose policy doesn't cover storage. Let's go deeper on option 1, requiring proof of coverage, because the implementation of this matters. At move-in, the tenant provides a certificate of insurance that confirms they have a marine policy for their boat or an RV policy for the motorhome or travel, travel, travel trailer. You verify that the coverage is active and that it covers the vehicle while in storage, not just while in use. Then you file the certificate and set a renewal reminder. The annual renewal is standard. So if the coverage lapses, the tenant gets a notice and a window to reinstate before the access is suspended. The conversation with tenants about this requirement is critical. You're not creating a bureaucratic hurdle, you're protecting them. And you need to frame it that way. We require insurance coverage for all stored vehicles because we want to make sure you are protected if something happens. Here's what we need from you. The tenants who push back are usually the ones who don't realize their, their vehicle isn't covered. When you explain the gap in their homeowner's policy, most of them respond with something along the lines of, you know, they had no idea. Great, I need to fix that. Or they'll buy a policy from you. But the conversation alone earns you a loyal tenant. Option 2, the facility-sponsored program. And this is the revenue angle. Here's how it works. You partner with a specialty insurance provider that offers marine or RV storage coverage. At move-in, tenants who don't have their own policy or whose policy doesn't meet your coverage requirement can add a facility-sponsored policy directly to their lease. They pay a monthly premium. You earn a commission or a revenue share or a flat fee. Depends on how you set it, whatever arrangement you have with the provider. And the economics will vary by provider and by vehicle value tier. But at a 100-space facility with moderate uptake, the annual revenue contribution for a well-run insurance program can be meaningful. Beyond the revenue, the program serves a genuine tenant need. Not every tenant has a marine or RV policy that covers storage. So offering it straightforward, affordable opt-in or option at move-in solves their problem, generates revenue for you simultaneously. I'd recommend getting quotes from 2 or 3 specialty Storage insurance providers before you implement. The program varies in coverage quality, commission structure, and how they handle claims. So choose the program you'd want if you were the tenant, not the one with the highest commission, because your reputation depends on how claims are handled, not on the monthly premium. Let me give you the 2 failure modes I see most often on tenant insurance. Failure mode 1, the operator who requires insurance but doesn't verify it. Maybe they ask for a certificate at move-in, file it, and never look at it again. And then 2 years later, the tenant's boat is damaged, the operator asks for their certificate, and it expired 14 months ago. So the tenant's coverage lapsed and nobody caught it. That conversation that follows that is not the one you want to have, and it was entirely avoidable with an annual renewal system. Failure mode 2: the operator who offers a facility insurance program but treats it as a passive add-on. It's mentioned in the move-in paperwork but not discussed in the leasing conversation. That program probably has a single-digit uptake success rate. The revenue never materializes because the program is never really sold. Tenant insurance, whether required coverage or a facility program needs to be part of the leasing conversation, not buried in the paperwork. The operators who execute this well talk about it directly. Something like, before we finalize your move-in, I want to make sure you have coverage for your vehicle while it's in storage. It's a natural part of the conversation in the move-in. A lot of tenants don't realize their homeowner's policy doesn't cover this. And here's what we require, and here's an option if you need it. I mean, it's It's a very easy conversation, and that conversation takes 2 minutes. It builds trust, reduces liability, and if you're running a facility program, generates revenue. A few practical notes on implementation for the insurance requirement. Use a standard certificate, certificate of insurance. They'll provide it for you. Form ACORD-25 is the industry standard. Specify in your lease that coverage must be active and must cover the vehicle while in offsite storage. Build your renewal tracking into your property management software or your CRM. Set a 60-day reminder before each certificate expires. For the facility program, your CRM can handle the enrollment and billing, or the insurance company will help— will show you how to do that. Your management platform should be able to. A good insurance partner will provide marketing materials, enrollment forms, claims support, all the above. Make sure your staff knows the coverage basics well enough to answer tenant questions. They don't need to be insurance experts, but they should be able to explain what the policy covers and how to file a claim. For new acquisitions, audit the existing tenant insurance coverage in your first 30 days. It's common to find facilities where coverage was never required and most tenants are uninsured. Implementing the requirement on existing tenants requires a little bit of a grace period and Clear communication, but it's worth doing. And every tenant who completes the process is a tenant who's protected and a tenant you have a cleaner liability position with. Here's the frame: tenant insurance in this vertical is not administrative overhead. It's a trust-building conversation, a liability management tool, and a revenue opportunity. The operators who handle it deliberately Outperform the ones who treat it as paperwork. All right, next up, day 49, the tenant lease for boat and RV and key clauses that differ from self-storage. We're going into the 8 lease clause changes, or that 8 lease clauses that change, uh, when the stored asset has a title and a hull number and a value that starts in 5 figures. Like this video if the homeowner's policy gap was news to you. It's usually news to most tenants too, and telling them is one of the highest trust conversations you can have in the leasing process. And subscribe so you don't miss day 49. The lease episode has specific language that self-storage leases don't cover. Using the wrong lease in this vertical can create real exposure. And then share this with a boat and RV operator who hasn't formalized their insurance requirement yet. The failure modes we covered today are entirely avoidable. Folks, StorageMoguls.ai has the full operations framework for boat and RV facilities, including the insurance program evaluation guide and the certificate tracking system. It's free to join, so join Storage Moguls. Handle insurance deliberately and protect your tenants before something happens, not after. See you tomorrow.