The California Department of Insurance fined self-storage company, c, $250,000 for offering and selling more than $2.1 million in insurance products to its renters without an insurance license.
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, the CDI 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 order alleges between October 2017 and July 2019, SmartStop offered and sold roughly 19,500 insurance policies to California consumers without an insurance license from the department as required by law.
The CDI’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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