In a new class-action lawsuit, a Florida man alleges self-storage operator Public Storage deceived customers who bought tenant insurance policies.

The suit, filed in federal court in Miami, seeks restitution for all of the insurance premiums paid to Public Storage by its customers over the past four years, an amount that potentially could total hundred of millions of dollars.

The plaintiff, Colin Bowe, alleges that Public Storage sold tenant insurance to him and other storage consumers without properly disclosing that the company retains a “substantial portion” of the premiums. The suit claims that the insurance program offered by Public Storage is “a hidden profit center for itself that kicks back unconscionable profits at the expense of consumers.”

Coral Gables, FL, law firm León Cosgrove is representing Bowe, who rented a unit at a Public Storage facility in Miami.

Alleged ‘deception’

“They tell consumers [the premium] is a pass-through cost and they will play no role in the insurance of the consumer’s goods,” the firm’s founding partner, Scott Cosgrove, told The SpareFoot Storage Beat. “Meanwhile, they are taking an enormous chunk, if not all of it, and we think it is a deception.”

Representatives of Public Storage could not be reached for comment. The REIT is scheduled to file its response to the suit in early June.

Holland & Knight of Miami and Newport Trial Group of Newport Beach, CA, are representing Public Storage in this case. Attorneys with the two law firms could not be reached for comment.

Cosgrove said the suit is open to all Public Storage customers who bought insurance from the company during the past four years. Public Storage sells hundreds of thousands of insurance policies each year, with 700,000 issued in 2012 alone.

Perfect Solution Storage Insurance
Perfect Solution Storage Insurance provides tenant insurance for Public Storage.

Insurance profit

The sale of insurance policies is high-margin source of revenue for Public Storage. As noted in the company’s 2013 financial report, the company grossed $84.9 million from the sale of tenant insurance policies in 2013. Of that, $67.8 million was net profit.

Public Storage’s insurance revenue rose 8.8 percent from 2012 to 2013. The number of customers buying policies also has been on the rise. In 2011, 61 percent of the REIT’s customers bought insurance policies marketed by Public Storage. In 2013, that number increased to 65 percent.

Still, revenue from tenant insurance remains a small portion of the company’s total revenue. In 2013, the company racked up revenue of $1.85 billion, with just 4.6 percent of that coming from tenant insurance.

The fine print

Public Storage requires all of its tenants to carry insurance. Customers are not required to buy the coverage offered by Public Storage; for instance, customers in many cases can rely on their homeowner’s or renter’s insurance policies.

However, the suit alleges that the company encourages employees to aggressively sell insurance and that employees are provided with scripted sales language.

The coverage offered by Public Storage, called Perfect Solution Storage Insurance, is underwritten by New Hampshire Insurance Co. The suit claims that the premiums are excessive compared with similar policies and that there’s no correlation between the underwritten risk and the premium amounts. New Hampshire Insurance is not a defendant in the suit.

Public Storage lawsuit
The lawsuit was filed in federal court in Miami.

Perfect Solution Storage’s cheapest policy in Florida costs $11 a month for $3,000 worth of coverage, according to the suit. By contrast, $4,000 worth of coverage from U-Haul’s recommended insurer, SafeStor, goes for $6 a month in Florida.

The suit says Bowe and other customers who bought tenant insurance received a contract addendum authorizing Public Storage to “conduct the administrative function of receiving premium to send to the insurance company on my behalf.”

The premium appears as a line item on monthly statements for Public Storage customers. According to the suit, the statements are designed to lead customers to believe the premiums are collected by Public Storage and fully passed on to the insurance company. In fact, the suit claims, Public Storage “enriches” itself by retaining much of each premium.

Similar case

Cosgrove compares his client’s lawsuit against Public Storage with another legal case in Florida. Cosgrove said in that case, Costa Cruise Lines line invoiced customers for a port charge. Part of the port charge did go to the port, he said, but the cruise line also kept a portion.

“The cruise line became liable for that fee because they had provided an impression to the consumer that they were collecting that fee on behalf of a third party,” Cosgrove said.

The suit against Public Storage contains five counts: violation of the Florida Deceptive and Unfair Trade Practices Act, breach of contract, unjust enrichment, breach of covenant of good faith and fair dealing, and unconscionability.

Self-storage attorney Jeffrey Greenberger says tenant insurance is a good idea for storage consumers.
Self-storage attorney Jeffrey Greenberger says tenant insurance is a good idea for storage consumers.

Another perspective

Self-storage industry attorney Jeffrey Greenberger of Cincinnati law firm Katz Greenberger & Norton said he isn’t convinced that Public Storage did anything wrong in this case. Greenberger is not involved in the suit.

“What really made me scratch my head is that [the suit] relies very heavily on this idea that people were basically forced or received this hard sell into insurance,” Greenberger said. “Of course, they want you to buy their insurance and it is profitable for them, but you could still have your own [coverage].”

Greenberger said tenant insurance is a good idea for consumers because deductibles on most homeowner’s and renter’s policies are too high to cover a total loss of contents in a storage unit.

“If my deductible is $2,500 and I agree to a $3,000 value limit at Public Storage and I had a complete loss, I’d get $500 back, at best,” Greenberger told The SpareFoot Storage Beat.

Greenberger said it’s common for self-storage operators to collect insurance premiums on behalf of insurers. Then, the insurers typically return a portion of the premiums to the operators in the form of marketing or administrative fees.

Greenberger compares Public Storage’s tenant insurance program with coverage offered by rental car companies.

“If it turns out to be the case that you aren’t allowed to recommend your own insurance to people … a lot of other businesses would be in bad, bad shape,” Greenberger said.

Alexander Harris


  1. I went in to rent a unit and was told if I didn’t have the insurance I couldn’t rent the unit and it was a mandatory thing to have and all storage company’s are the same as if I was to go somewhere else

  2. I just went to rent a unit and the lady said insurance was mandatory and it was 11.00 so I asked her over and over if i had to buy it and she said yes so I read the insurance Contract. My homeowners policy covers the rental and I told the lady that I don’t have to buy insurance cuz I have it covered. She played dumb. I strongly suspect the employees get a bonus based on up selling this insurance.

  3. I have been a tenant at public storage for over 10 years they told me there insurance was mandatory,my rate right now is 8.00$ per unit so 16.$,The rent increases are unfair and too high,Its a big job to move the stuff even to just get rid of it,God knows I could have bought everything new by now at there rates? I would like to know if I can get money back? I am in Tampa Florida the16415 N Dale Mabry hwy location33618,,,Thank you,

  4. They will use illegal tactics to sell you their policy. They will aggressively try to convince you that your homeowners policy does not cover everything per their requirements, and that you can’t use renters insurance at all. If you still decline their policy, they will find reasons not to rent to you. They may say that they need another form of identification, or require you have a lock present at that moment or they can’t complete the paperwork. If you don’t have one, they will offer that you can buy a cheap lock from them for $30 or go get one. Most people will go and get a lock elsewhere, however when you return they will have a different employee there to hammer you over the warranty. The lock excuse just gives them time to run it by another employee to attack you on the warranty when you return.

    When all else fails I once had an employee claim that someone had reserved my unit over the phone while I was out getting a different lock, that time I had a lock but it wasn’t “secure” enough.

    Lastly, some will force you to get the warranty to
    start off and cancel it. However when you try to cancel it you forfit most of the premium, or they will prorate it and send you a check months later for $2.

    1. Yes yes yes they did me like this to until I put my foot down in what happens is they live there and they switch out before u come back yes but I knew how it worked I would knock right at the Lil apartment door in ask for that person

  5. I used to work for Public Storage and yes they make the employees learn about 8 scripts and one of them 8 is insurance. I could not do it no more I worked there for 8 years the place is horrible to work for they don’t pay their employees well at all. I felt sorry for the customers that rent with Public Storage because they treat their employees and customers totally wrong.

  6. I am having an issue with public storage now. I wish I would have seen this 2 months ago! Its too late for me to file now.

    1. Yes if I were you I would change it they took my money for nthin for a while in when I didn’t want to gt insurance they would get angry in forced me told me if I didn’t I could not get a unit

  7. True it happen to me three times in tampa fl emilia and they forced me my sister and my mom to get the coverage in when I had an issue with my stuff insurance was suppose to cover it they had bed bugs in the units on 56 and sligh the one near there and they didn’t help me at all in it was on their behalf my stuff was brand new I was so angry about this.

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