short term insurance what are the must have items ?

[Itay Heled]

Hi BP community 

I recently turn my long term rental 4bdrm 2 bath house in south Euclid  into short term furnished house .

currently listing  on Airbnb VRBO & Booking .

I have a standard insurance with state farm right now with 2 million liability policy .

I understand a STR policy is a needed but what is that exactly mean ?

what specific items you find  necessary  to add for a short term rental insurance and what is roughly the cost ?

thanks!

Itay

[Lauren Kormylo]

Short Term Rental insurance is a policy where the insurance company knows you are doing short term rentals, and agrees to cover you. STRs are considered more risky for an insurer than long term rentals. And much more risky than you living in your own house. The reason is that you will have a steady stream of guests who are unfamiliar with your house, and that can lead to more risk for injury and more damage to the property. If you only have your current standard homeowner's policy and an STR guest hurts themselves and sues you, or a guest accidentally starts a kitchen fire and destroys your kitchen or the entire house, your insurance company won't cover you at all. So you MUST have STR insurance.

STR insurance covers what your regular homeowner's policy covers, and then adds extras. If a guest injures themselves on your property and sues you, the insurance will protect you financially. If a guest steals items from your house or breaks or destroys something, insurance may cover that (depending on your policy and deductible). STR insurance may include coverage if you have bedbugs, they may pay for the cost of an exterminator and pay you lost rental income because of that, up to a certain amount. It may cover lost rental income if you have a water leak or fire or other major problem with the house and you can't rent it, up to a certain amount of money.

We can't say what it will cost you, because it varies widely because of the size of your house, the location, whether you have a fireplace or a pool or something else that would increase risk, and many other factors.  You will have to request a quote from different companies. 

Proper Insurance Co. is probably the most expensive, but it also has coverage for things that other companies don't have. Others are Foremost, and CBIZ. Many insurers who write regular homeowner's policies will now add STR insurance to your policy and those companies include Farmers, Allstate, American Family, USAA, and others.

So the first thing you should do is find out if your existing insurance company offers STR insurance. You may be able to add it through them easily and at a reasonable cost.

I use Proper Insurance Co. for my STR. Like @Jeremy Jareckyj suggests, in the case of a major event, I am covered for loss of income for about a year's worth of rent. I also have bedbug coverage.