What the Recent California Supreme Court Ruling Means for Our Industry
While some cases within the United States judicial system make headlines across the country, others get less coverage. Although the recent ruling in the Supreme Court of California on A1 Vs. Heckart didn’t make the front page of the major papers, it will have positive implications for On The Move, our customers, and the end consumer.
The Incident
In June of 2012, Samuel Heckart rented a storage unit at one of A-1 Self Storage Inc.’s facilities. As part of his rental, Heckart agreed to pay $55 per month in rent and signed a contract, which included a document called “A-1 Self Storage Rental Agreement.”
Additionally, the storage company offered Heckart the opportunity to purchase liability coverage for the property that he stored in the unit for $10 more each month. The signed agreement said that if the tenant chose not to opt in to this coverage, he would have to provide proof of insurance within 30 days, and that failing to do so would automatically enroll him in the liability program. When Heckart did not provide proof of insurance, the storage company enrolled him in the plan as per the agreement.
The Lawsuit
In April of 2013, Heckart sued the storage company. His claim stated that the program is technically insurance, which A-1 Self Storage is not licensed to sell. Without getting too much in to the legal jargon, the case rested on whether or not protection policies like the one A-1 offered are insurance like you buy on your car or a protection policy like those you might get on a new television.
Over the next five years, courts throughout the California system heard arguments from both sides. Eventually, the case found its way into the Supreme Court of California. At the end of April 2018, the court issued its decision.
The Decision The state’s Supreme Court upheld the lower court’s decision that the protection plan did not qualify as insurance under California law. The court made a point to say that the agreement was between the storage company itself and renters. Since the policy is a service given to customers and not an indemnity, it is a protection plan.
The Consequences
This is excellent news for storage unit owners and their customers. Without having to become licensed insurance brokers, storage unit owners can continue to offer protection at affordable rates to each of their customers.
At On The Move, we are thrilled to continue to offer a great protection plan for our customers. This ruling ensures that we can provide robust liability coverage. In fact, our customers can receive up to $5 million in coverage, and includes comprehensive and collision.
As a one-stop shop for all your truck needs, we look forward to offering the same excellent service and protection that our customers have come to expect.
Read more at onthemovetrucks.com
