Short Term Rental Specific Insurance Policies

[Stephan Garcia]

Hello All

We are in the process of acquiring properties for use as STRs. When it comes to insuring the properties, I had been doing some research trying to understand the types of insurance these types of properties should have. Here's what I have found:

1. I can take out a typical home owner policy and add an addendum to cover for short term rentals but it may have some holes in it. 

2. Airbnb can cover some those holes with their policy but that's only up to $1M, that would be an issue if the property was completely destroyed by fire or something a guest may do. 

3. I came across a company called Proper Insurance, they are backed by Lloyds and have an STR specific homeowners insurance product, has anyone heard of them? Are they or their policies legitimate? Has anyone heard of any similar companies that offer policies specific to STRs?

Thank you for your feedback in advance. 

[Joe C.]

I'm currently shopping around for replacement insurance for my Miramar Beach home. 1.5 years ago I had a quote from Proper for $11K vs. Fednat for $2700. Proper included $2 mil liability but I already have an umbrella policy, it was 5% hurricane deductible vs. 2% Fednat, $600K property coverage vs $900K for Fednat, $150K income loss limit vs $90K for Fednat, etc. Proper included bedbug treatment, Fednat none I think. Is it good insurance? Sure but if you need hurricane coverage for Florida then it's crazy expensive.

Now with Fednat exiting the insurance market I have a quote for $6700 from Tower Hill and still shopping around. Usually policies will cover 10% of your property coverage as income loss for an STR if they cover STRs at all.

Bottom line make sure you understand the coverage and dig into the comparison details. It's easy to get a quote with insufficient coverage or way more coverage than you need, so take the time to understand the basics before signing up.