STR insurance for rental arbitrage

[Gerald Santy]

Hi Everyone!

First BP post  :)

My partner and I are forming a business focused on STR arbitrage (not cohosting). We were wondering what kind of insurance we should consider getting since we won't own these properties?

We will use either an LLC or corporate structure for the business so presumably we are covered from a personal liability perspective, but it seems like we should have additional coverage in case of a worst case scenario (e.g., renter burns house down, renter severely injured or dies on the property from accident, etc.)

So we aren't sure if the homeowners policy would cover situations like that since they are related to short-term renters or if we can get STR insurance on a property we don't own. Any thoughts or guidance would be helpful. How are others who use the arbitrage approach handling this?

It would also be interesting to know what the rough cost is for any insurance option you might propose.

Thanks in advance!

Gerry

[Jason Bott]

@Esther Rosenberg Proper is a great carrier for STR. They are one of the carriers we use for our clients. Only complaint I see online is their products can be more expensive than other options.

The Renters policy is a great option to protect the renter and landlord, but it should be noted that the Landlords insurance carrier also needs to be ok with the STR occupancy. If the landlord has a traditional rental policy underwritten as an annual rental, and a Property or Liability claim comes in under the Landlords policy that involved the STR exposure, that opens the door for the insurance carrier to deny a claim.

At the end of the day, the landlord & renter need to protect their interests with their own separate policies.