Storage Locker Insurance No Guarantee Of Theft Coverage

SAN FRANCISCO (KPIX 5) -- When you purchase insurance for your storage locker you might expect you'd be covered if your stuff is stolen. But if the  crook steals your lock along with your stuff, you might be wrong.

Take the case of John Kurnik. Every time he opens his Public Storage locker emotions flood up.

"It was horrible," Kurnik said, remembering the day he discovered it ransacked. His family's most valuable possessions were all gone.

"We made the mistake of labeling boxes, so it was easy for them to shop," he said.

Among the missing items a silver set, two vintage Disney marionettes and a special violin collection.

"I had 4 to 5 violins. My daughter played violin since she was 3," Kurnik explained.

READ MORE: Public Storage - KPIX 5 Investigations

Luckily he thought, he had insurance, purchased at Public Storage, as well as a record of on-time premium payments for 13 years. But despite  a police report and a meticulous list of missing items, his claim was denied.

"We got a denial letter, saying that there's no evidence of a burglary because we didn't have the lock that was cut off," he said.

The implication? Without a lock, he must be responsible.

"They are saying that we are the criminals. We set this up so we can make a fraudulent claim. No! That's not the way it is," Kurnik lamented.

Turns out Kurnik's not the only one whose insurance claim was denied because of a lock. ConsumerWatch has been getting similar complaints since 2010, like one from Ana Leon.

"It was about $12,000 dollars worth of items that were gone," Leon said. Her claim was also denied, even though a police report clearly said "an unknown suspect forced open the master lock" to her public storage unit.

Debra Ambers couldn't collect either, because her missing lock had been replaced with a new lock she had never seen. Mysteriously, she said Public Storage had the only key.

It's hard to believe that if  a crook steals your lock, along with your stuff, your insurance claim could be denied.

But check the fine print in the insurance policy offered at Public Storage: "A missing lock… or a lock different than the one placed by you, is not sufficient, standing alone, to establish forcible entry."

"An insurance policy is a promise, and the promise is not being kept," said attorney Dale Washington.

He has sued Public Storage in the past. "The most profitable item for them would be insurance and that is where the emphasis is," he said.

In this 2014 deposition, the company's senior vice president acknowledges the loss ratio -- or how much is spent paying claims and overhead -- was averaging about 10 percent.

"10 percent loss ratio means 90 percent profit," said Washington. Compare their 10% nationally to over 55%, the average loss ratio for all California insurers that year.

The company declined our request for an interview. Instead it tried to make the story go away by offering Kurnik $3,000 dollars plus three months free rent, but only if he signed a release saying he "will not make or cause to be made any statements that disparage, are inimical to, or damage the reputation of (Public Storage) Releasees .. to anyone, including but not limited to the media."

Public Storage later pressured him with a deadline to accept the offer, which Kurnik ultimately declined, noting the "pay off" was not officially an offer to "pay out" his insurance claim.

"Pay the insured amount, that is what we signed for," he said. "To block us from even considering the fact that we were burglarized, because we don't have a broken lock, that is just insanity."

The California Department of Insurance is investigating Kurnik's denial and says anyone with a similar complaint should immediately contact the agency.