What you need to know before using storage units in Hong Kong

As we all know, space in the city is at a premium, with many of us living in some of the smallest apartments on earth. While this is doable for many, overtime it is common for us to collect a bunch of stuff. From valuables to extra beds, to clothes, and even to electronics, you can bet that many people are struggling to find storage space for all the things that they own.

One of the most popular options is to store your extra things in a mini-storage facility. Since the handover these facilities have cropped up all over the city with an estimated near 500 facilities currently operating in the city.

While these facilities are a useful solution, the recent fire in Ngau Tau Kok highlights that there is a small chance that some facilities may not be as safe as we would like them to be, or as they should be. One of the major concerns is that if you were to store your stuff at one of these facilities, will you have insurance that covers these items, or what options are available to cover items in storage?

Like all other businesses in Hong Kong, storage facilities will usually have insurance in place that covers the business. What we mean by this is the business owner will secure a number of plans that aim to cover the risk of operating a business. For example, storage facility owners will most commonly secure fire insurance and building insurance.

The thing with this insurance is that it may not cover items stored in the business, it may only cover the building itself. This means that if there is say a fire, damage to the building's walls, roof, etc. will be covered, but the items stored within won't be.

It should also be pointed out here that even if a storage facility's insurance covers the goods stored within, there are likely strict conditions on what the plan covers, the amount covered, and what isn't covered. For example, some plans may exclude coverage if dangerous goods are stored on the premises, while others may not cover valuables and collectables worth over a certain dollar amount.

Yes, there are plans available in Hong Kong that cover your goods in storage. Most plans come in one of two options:

• Part of an existing home insurance plan

• A separate plan

The reason for this is because most of the home insurance plans sold in Hong Kong cover only items within a home at the time the policy is taken out. If you have items in storage, then you will likely need to extend coverage to include these items (a term insurers refer to as adding a "rider").

If you already have an in-place home insurance plan and decide to move some things covered by it into storage we strongly advise checking the documentation that came with the plan to see whether these will be covered, chances are high however that they may not be.  

If you do have goods in storage, here are four tips on how you can ensure they will be covered should anything happen to them.

• Ask the owner of the facility if they have insurance, and what it covers - This is important, as some facility owners may not actually have any insurance beyond what is included with the building. If there is a fire the walls, ceiling, floor, etc. will be covered but the materials inside won't be. Other facility owners will offer insurance for items stored, and others still will recommend you secure your own insurance.

• Read all insurance documentation carefully - In our experience, there are few plans that cover the full value of all your goods in storage. The vast majority will cover up to a certain percentage while others will only cover goods up to a certain dollar amount. As we noted above, plans won't cover the storage of dangerous goods like petrol tanks, compressed gas, etc.  

• Consider the condition of the physical building - This is an important lesson to learn from the fire in Ngau Tau Kok: the building did not have proper fire suppression (it is legal for buildings older than a certain age in Hong Kong to not have fire suppression systems). This increases that chance that should a fire break out there will be extensive damage, etc. If the building looks unsound, you may want to consider another storage facility.

• Don't be afraid to contact your insurer or broker - Finally, don't be afraid to talk with the team at Kwiksure. We can help you figure out whether your items will be covered and suggest the best plan that meets your coverage needs.