Insurance experts for Short Term Rental/ 2nd home

[Pranav Parikh]

Hi everyone, I am closing on a property near the Asheville market that I intend to use for vacations but also STR via airbb/vrbo. I am looking for insurance to adequately cover my liability as a potential STR as this is not my primary property. I have a quote for statefarm as a "homeowner policy" with "home-sharing endorsement". My family will end up using it <14 days out of the year.

The statefarm agent I am working with is assuring me that it will be "written as a seasonal/secondary home for you with the endorsements to cover the air B&B"

Is this adequate or should I be looking for more commercial full rental policy?

I would love to see what most STR hosts purchase for insurance in comparison and what the expected premiums are. As a frame of reference, my property is 2300 sqft, mountain views, 2021 new construction, 4bed/4bath

[Jonathan Greene]

You might want to try Obie Insurance. They are an online insurer specializing in insurance for investors and investment properties.

[Owen Rosen]

Quote from @Pranav Parikh:

Hi everyone, I am closing on a property near the Asheville market that I intend to use for vacations but also STR via airbb/vrbo. I am looking for insurance to adequately cover my liability as a potential STR as this is not my primary property. I have a quote for statefarm as a "homeowner policy" with "home-sharing endorsement". My family will end up using it <14 days out of the year.

The statefarm agent I am working with is assuring me that it will be "written as a seasonal/secondary home for you with the endorsements to cover the air B&B"

Is this adequate or should I be looking for more commercial full rental policy?

I would love to see what most STR hosts purchase for insurance in comparison and what the expected premiums are. As a frame of reference, my property is 2300 sqft, mountain views, 2021 new construction, 4bed/4bath

 Since you're planning on using the property 95% as a short term rental I'd confirm there isn't a limit on how many days it can be rented versus used by your family when written that way.  Get it in writing.

[Owen Rosen]

Quote from @Jonathan Greene:

You might want to try Obie Insurance. They are an online insurer specializing in insurance for investors and investment properties.

 I enjoy using Obie as an independent agent but the owner usage might not fit their guidelines in this case.

[Collin H.]

You need a commercial, overnight rental policy on your investment.  You are effectively operating a hotel. I personally recommend Southpoint Risk in Knoxville.  They are a broker representing several insurers.  I have also worked with CBIZ.

Tips:  Get maximum liability, and make sure the replacement cost is legit.  I had a cabin burn to the ground, and the cost to replace it exceeded my limit by 50 percent.  That one hurt.  

[Pranav Parikh]

Quote from @Collin H.:

You need a commercial, overnight rental policy on your investment.  You are effectively operating a hotel. I personally recommend Southpoint Risk in Knoxville.  They are a broker representing several insurers.  I have also worked with CBIZ.

Tips:  Get maximum liability, and make sure the replacement cost is legit.  I had a cabin burn to the ground, and the cost to replace it exceeded my limit by 50 percent.  That one hurt.  

Thanks, understood. 
I provided a recent appraisal with accurate estimates of replacement cost, which has been updated to match that estimate. It's higher was quoted to me initially using their "software"

[Pranav Parikh]

Quote from @Owen Rosen:

Quote from @Pranav Parikh:

Hi everyone, I am closing on a property near the Asheville market that I intend to use for vacations but also STR via airbb/vrbo. I am looking for insurance to adequately cover my liability as a potential STR as this is not my primary property. I have a quote for statefarm as a "homeowner policy" with "home-sharing endorsement". My family will end up using it <14 days out of the year.

The statefarm agent I am working with is assuring me that it will be "written as a seasonal/secondary home for you with the endorsements to cover the air B&B"

Is this adequate or should I be looking for more commercial full rental policy?

I would love to see what most STR hosts purchase for insurance in comparison and what the expected premiums are. As a frame of reference, my property is 2300 sqft, mountain views, 2021 new construction, 4bed/4bath

 Since you're planning on using the property 95% as a short term rental I'd confirm there isn't a limit on how many days it can be rented versus used by your family when written that way.  Get it in writing.

 Yes, called the agent to discuss this topic. she assured me that it would be underwritten to not have limitations. As long as I stay at the property just 1 night a year. (I intend to actually vacation there at least for a 4-10 days yearly). 

Other concern was that as this is a 2nd home, the policy would deny claims if I am not personally residing at the premises. They also assured me that is not required, with endorsements for STR effective on the policy

[Owen Rosen]

Quote from @Pranav Parikh:

Quote from @Owen Rosen:

Quote from @Pranav Parikh:

Hi everyone, I am closing on a property near the Asheville market that I intend to use for vacations but also STR via airbb/vrbo. I am looking for insurance to adequately cover my liability as a potential STR as this is not my primary property. I have a quote for statefarm as a "homeowner policy" with "home-sharing endorsement". My family will end up using it <14 days out of the year.

The statefarm agent I am working with is assuring me that it will be "written as a seasonal/secondary home for you with the endorsements to cover the air B&B"

Is this adequate or should I be looking for more commercial full rental policy?

I would love to see what most STR hosts purchase for insurance in comparison and what the expected premiums are. As a frame of reference, my property is 2300 sqft, mountain views, 2021 new construction, 4bed/4bath

 Since you're planning on using the property 95% as a short term rental I'd confirm there isn't a limit on how many days it can be rented versus used by your family when written that way.  Get it in writing.

 Yes, called the agent to discuss this topic. she assured me that it would be underwritten to not have limitations. As long as I stay at the property just 1 night a year. (I intend to actually vacation there at least for a 4-10 days yearly). 

Other concern was that as this is a 2nd home, the policy would deny claims if I am not personally residing at the premises. They also assured me that is not required, with endorsements for STR effective on the policy

Get in writing :)

[Sarah Kensinger]

I can about promise you Statefarm will leave you high and dry! They just left a homeowner high and dry, when a personal residence flooded due to a pipe quietly leaking for months! It was a complete run around for months and months until she took the story to social media, then a ton of people said it's happened to them too. Unfortunately for Statefarm, she is a small business owner in San Deigo with a large following. So, that got them motivated quick, like literally overnight! 

I would highly recommend checking out Proper Insurance, Erie Insurance, and Steadily. When it comes to Steadily you must read all the fine print, since they tend to give STR owners a policy that explicitly say STR stays are excluded. I can say a better policy is worth the extra money and you won't regret it!

[Owen Rosen]

Quote from @Sarah Kensinger:

I can about promise you Statefarm will leave you high and dry! They just left a homeowner high and dry, when a personal residence flooded due to a pipe quietly leaking for months! It was a complete run around for months and months until she took the story to social media, then a ton of people said it's happened to them too. Unfortunately for Statefarm, she is a small business owner in San Deigo with a large following. So, that got them motivated quick, like literally overnight! 

I would highly recommend checking out Proper Insurance, Erie Insurance, and Steadily. When it comes to Steadily you must read all the fine print, since they tend to give STR owners a policy that explicitly say STR stays are excluded. I can say a better policy is worth the extra money and you won't regret it!

 Not carrying water for State Farm here as I have plenty of issues with them but a slow leak is often not covered under any insurance policy.  No idea what really happened in the case you mentioned but depending on the facts of the loss you could have an issue with any company.

With regards to Steadily I do represent them along with many other carriers but curious why you would recommend them and then say that they will exclude short term rentals?

If you provide the proper usage for the property at the time of application there shouldn't be that sort of exclusion.

Overall your point about making sure you have appropriate rather than "cheap" coverage is one I agree with wholeheartedly.  Or at least know what you're buying and what you're not.

[Sarah Kensinger]

Quote from @Owen Rosen:

Quote from @Sarah Kensinger:

I can about promise you Statefarm will leave you high and dry! They just left a homeowner high and dry, when a personal residence flooded due to a pipe quietly leaking for months! It was a complete run around for months and months until she took the story to social media, then a ton of people said it's happened to them too. Unfortunately for Statefarm, she is a small business owner in San Deigo with a large following. So, that got them motivated quick, like literally overnight! 

I would highly recommend checking out Proper Insurance, Erie Insurance, and Steadily. When it comes to Steadily you must read all the fine print, since they tend to give STR owners a policy that explicitly say STR stays are excluded. I can say a better policy is worth the extra money and you won't regret it!

 Not carrying water for State Farm here as I have plenty of issues with them but a slow leak is often not covered under any insurance policy.  No idea what really happened in the case you mentioned but depending on the facts of the loss you could have an issue with any company.

With regards to Steadily I do represent them along with many other carriers but curious why you would recommend them and then say that they will exclude short term rentals?

If you provide the proper usage for the property at the time of application there shouldn't be that sort of exclusion.

Overall your point about making sure you have appropriate rather than "cheap" coverage is one I agree with wholeheartedly.  Or at least know what you're buying and what you're not.

They had coverage just a very bad adjuster. Once they hired a personal adjuster and started sharing the story things changed big time. 

As I'm sure you know Steadily is a brokerage and I don't think the agent reads every policy they pull through. So yes, there has been many stories of a STR homeowner reading the fine print and going wait a minute, this doesn't cover me. But if everyone pays attention to what the company is offering, Steadily can also offer some great coverage.

[Owen Rosen]

Quote from @Sarah Kensinger:

Quote from @Owen Rosen:

Quote from @Sarah Kensinger:

I can about promise you Statefarm will leave you high and dry! They just left a homeowner high and dry, when a personal residence flooded due to a pipe quietly leaking for months! It was a complete run around for months and months until she took the story to social media, then a ton of people said it's happened to them too. Unfortunately for Statefarm, she is a small business owner in San Deigo with a large following. So, that got them motivated quick, like literally overnight! 

I would highly recommend checking out Proper Insurance, Erie Insurance, and Steadily. When it comes to Steadily you must read all the fine print, since they tend to give STR owners a policy that explicitly say STR stays are excluded. I can say a better policy is worth the extra money and you won't regret it!

 Not carrying water for State Farm here as I have plenty of issues with them but a slow leak is often not covered under any insurance policy.  No idea what really happened in the case you mentioned but depending on the facts of the loss you could have an issue with any company.

With regards to Steadily I do represent them along with many other carriers but curious why you would recommend them and then say that they will exclude short term rentals?

If you provide the proper usage for the property at the time of application there shouldn't be that sort of exclusion.

Overall your point about making sure you have appropriate rather than "cheap" coverage is one I agree with wholeheartedly.  Or at least know what you're buying and what you're not.

They had coverage just a very bad adjuster. Once they hired a personal adjuster and started sharing the story things changed big time. 

As I'm sure you know Steadily is a brokerage and I don't think the agent reads every policy they pull through. So yes, there has been many stories of a STR homeowner reading the fine print and going wait a minute, this doesn't cover me. But if everyone pays attention to what the company is offering, Steadily can also offer some great coverage.

Steadily operates an agency but they're mainly an MGA writing their own product.
We work with that product and like it.
However, I believe it's better to work with an agency that is totally independent and especially one where a knowledgeable agent isn't going to "mistakenly" write a worthless policy and leave it up to the policy holder to catch it after the fact. That's horrific.

[Sarah Kensinger]

Quote from @Owen Rosen:

Quote from @Sarah Kensinger:

Quote from @Owen Rosen:

Quote from @Sarah Kensinger:

I can about promise you Statefarm will leave you high and dry! They just left a homeowner high and dry, when a personal residence flooded due to a pipe quietly leaking for months! It was a complete run around for months and months until she took the story to social media, then a ton of people said it's happened to them too. Unfortunately for Statefarm, she is a small business owner in San Deigo with a large following. So, that got them motivated quick, like literally overnight! 

I would highly recommend checking out Proper Insurance, Erie Insurance, and Steadily. When it comes to Steadily you must read all the fine print, since they tend to give STR owners a policy that explicitly say STR stays are excluded. I can say a better policy is worth the extra money and you won't regret it!

 Not carrying water for State Farm here as I have plenty of issues with them but a slow leak is often not covered under any insurance policy.  No idea what really happened in the case you mentioned but depending on the facts of the loss you could have an issue with any company.

With regards to Steadily I do represent them along with many other carriers but curious why you would recommend them and then say that they will exclude short term rentals?

If you provide the proper usage for the property at the time of application there shouldn't be that sort of exclusion.

Overall your point about making sure you have appropriate rather than "cheap" coverage is one I agree with wholeheartedly.  Or at least know what you're buying and what you're not.

They had coverage just a very bad adjuster. Once they hired a personal adjuster and started sharing the story things changed big time. 

As I'm sure you know Steadily is a brokerage and I don't think the agent reads every policy they pull through. So yes, there has been many stories of a STR homeowner reading the fine print and going wait a minute, this doesn't cover me. But if everyone pays attention to what the company is offering, Steadily can also offer some great coverage.

Steadily operates an agency but they're mainly an MGA writing their own product.
We work with that product and like it.
However, I believe it's better to work with an agency that is totally independent and especially one where a knowledgeable agent isn't going to "mistakenly" write a worthless policy and leave it up to the policy holder to catch it after the fact. That's horrific.

I agree but like to give everyone their options.

[Alyson Gordon]

Quote from @Owen Rosen:

Quote from @Pranav Parikh:

Hi everyone, I am closing on a property near the Asheville market that I intend to use for vacations but also STR via airbb/vrbo. I am looking for insurance to adequately cover my liability as a potential STR as this is not my primary property. I have a quote for statefarm as a "homeowner policy" with "home-sharing endorsement". My family will end up using it <14 days out of the year.

The statefarm agent I am working with is assuring me that it will be "written as a seasonal/secondary home for you with the endorsements to cover the air B&B"

Is this adequate or should I be looking for more commercial full rental policy?

I would love to see what most STR hosts purchase for insurance in comparison and what the expected premiums are. As a frame of reference, my property is 2300 sqft, mountain views, 2021 new construction, 4bed/4bath

 Since you're planning on using the property 95% as a short term rental I'd confirm there isn't a limit on how many days it can be rented versus used by your family when written that way.  Get it in writing.

Agree with this - I have a similar policy as what you're referring to and I can rent it out 26 weeks out of the year. I'm in a beach market so that isn't an issue for me since its so seasonal.

Proper is the gold standard for this type of insurance but you'll pay like its actually gold :)