Homeowners insurance for an STR

[Marc Shin]

Hello. i'm under contract to purchase a duplex which I will convert to an STR. I'm purchasing the duplex in an LLC. Any suggestions for what coverages need to go into the property insurance policy? also is $1.0M sufficient for Landlord liability? or do I need more like $3.0M for landlord liability?

[James Carlson]

Just be sure to tell your carrier exactly what you're doing. (Trying to skimp on coverage by not telling them you're Airbnb-ing the place will defeat the purpose of insurance if they deny a claim because you weren't truthful.)

There are specific STR insurance carriers like Proper Insurance, but most major carriers offer a rider for vacation rental or short-term rental insurance as well.

You'll get different opinions on whether $1M liability is enough. No one has the "right" answer. It's just how do you personally weigh paying more for less risk on the back end. 

Oh, and check your city's STR regulations. A) Just make sure you can do Airbnb in a non-owner occupied property. (Airbnb laws are a total patchwork city-to-city here in Colorado.) And B) most STR regulations have a requirement for how much liability insurance you have to carry.

Good luck!

[John Underwood]

I agree with telling your insurance agency you are going to have a STR and get the correct insurance.

I personally think 1 million liability is plenty.

[Garrett Brown]

Hey Marc, congrats on going under contract. There are several STR insurance options nowadays. The most popular are Steadily, Proper, and CBIZ. You can also get a specific STR policy done by some of the bigger ones (State Farm, etc.). by looking into things with an insurance broker that can shop around for you. I think 1 million is enough as well and is what I have on my property.

[Michael Baum]

Hey @Marc Shin, you don't want a landlord or homeowners policy. You want a short term rental policy like @Garrett Brown listed.

Regarding the 1m liability, we have 2m and a 5m umbrella.

Now this is going to depend on where your STR is. We have 3 decks totaling nearly 1500sqft along with 3 sets of deck stairs.

I am religious about checking and maintenance on the decks, stairs and railings just so I don't have a guest issue.

If you don't have a lot of outdoor possible trouble spots like decks, pools, hot tubs etc. You might be able to get away with less on liability.

Personally I don't want to lose everything due to a major claim.

[Patricia Andriolo-Bull]

Like other have said on the insurance.  A good policy will also cover loss of use should an unlikely event happen.

Re: liability. I went from $5M to $3M, mostly because I also have the LLC which provides a bit of separation from my personal assets. Just be sure you actually keep the LLC and rental property separate and don't commingle any assets/accounting.

[Owen Rosen]

It's very easy to get caught up on the names of policies.  Don't worry about that as there are different ways to get to town and different companies might use different terminology.

Work with a knowledgeable agent that talks your through your risks and don't try to conceal what you're actually doing.  If you do that, you'll be fine.

[Andrew Steffens]

Make sure the unit has STR hazard and your liability is $1M or higher and you will be good to go!

[Sarah Kensinger]

If you're running an STR you must have STR commercial insurance! Even a tree falling on the property or fire would not be covered, if they found out you "broke" the policy agreement by using a landlord policy for a STR.