News: 2020 Press Release
ORANGE, Calif. – The California Department of Insurance fined self-storage company, SmartStop Asset Management, LLC, $250,000 in monetary penalties for offering and selling more than $2.1 million in insurance products to its renters without an insurance license.
“Companies that are not properly licensed to transact insurance in California place policyholders at risk because the insurers have not met the standards required under state law,” said Insurance Commissioner Ricardo Lara. “In this case, my Department’s investigation ended this illegal activity to protect California renters throughout the state.”
SmartStop Asset Management, LLC and its affiliates, collectively “SmartStop”, control, manage, or contract with other entities to manage self-storage facilities that are leased to California renters.
On July 27, 2020, the Department issued a Cease and Desist order to SmartStop, requiring the unlicensed company to immediately stop selling insurance products to their California storage unit renters. The Cease and Desist Order alleges between October 2017 and July 2019, SmartStop offered and sold approximately 19,500 insurance policies to California consumers without an insurance license from the Department as required by law.
The Department’s investigation discovered SmartStop charged renters more than $2.1 million for renters’ insurance, retaining more than $1.8 million as operating fees. It was not disclosed to renters that they would be paying high fees to SmartStop for insurance that actually cost far less.
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The California Department of Insurance, established in 1868, is the largest consumer protection agency in California. Insurers collect $310 billion in premiums annually in California. Since 2011 the California Department of Insurance received more than 1,000,000 calls from consumers and helped recover over $469 million in claims and premiums. Please visit the Department of Insurance website at www.insurance.ca.gov. Non-media inquiries should be directed to the Consumer Hotline at 800-927-4357. Teletypewriter (TTY), please dial 800-482-4833.
Source: California Department of Insurance.
California Department of Insurance issued the above Press Release on September 4, 2020.