Specific STR Insurance Worth It?

Question

Do you feel STR insurance like Proper which costs me about $1,500 a year more per property is worth it? As compared to a regular policy, that is ok with STR, in conjunction with AirBNB/VRBO coverage and my umbrella insurance for liability.  I'm small time and in the event of a catastrophe could eat the lack of business income.

Andrew Steffens · Answer

I have a house under contract for a client.  For context, it is about $950k a mile or so from the coast (Does $170k a year in income for those of you who like to know these things), has a pool and all the bells and whistles really.  The owner is paying about $16k and my client just got a quote from proper for $23k a year.  Absolutely insane, preliminary regular DP3 policy quotes coming in around $8k and client will get an umbrella for extra liability probably $100-200 a month tops.  Generally speaking I think Proper is way to expensive.

Bruce Woodruff · Answer

I used State Farm because I had them for my primary home. I asked and they said that they had insurance specifically for STRs. I wanted to make sure that they knew exactly what the situation was in case of an incident. I had 2 houses and the price was about $100 mo each.....

Fortunately I never had any accident or reason to test out the insurance....

Michael Koeplin · Answer

I think the real question is less “Is STR-specific insurance worth it?” and more:

“What risks are you intentionally retaining versus transferring?”

A lot of the difference between a standard policy that permits STR activity and a true STR-focused policy comes down to:

• coverage breadth
• underwriting intent
• claims interpretation
• operational assumptions
• business-income handling
• amenity/off-premises exposure
• guest-caused damage treatment

For some operators, paying an additional premium for broader coverage certainty absolutely makes sense.

For others with:

• lower leverage
• strong liquidity
• fewer amenities
• lower occupancy
• simpler operations
• higher risk tolerance

retaining some of that exposure may be a rational business decision.

I also think many owners underestimate how often claims become “gray-area” disputes rather than catastrophic losses. Those are often the situations where policy structure and underwriting language matter most.

And regardless of carrier, I would personally be cautious about treating OTA protections as a primary risk-transfer strategy. Those programs can be valuable, but they are not always designed to function like a dedicated commercial insurance policy.

Good discussion here. This is really a risk-management philosophy question as much as an insurance question.

Michael Koeplin

Andrew Street · Answer

That’s a great question and honestly, it’s one a lot of small-to-mid-size STR operators wrestle with.

Here’s how I usually break it down with clients:

First, the real difference isn’t just “STR policy vs. regular policy.” It’s about coverage certainty and claims experience.

A standard policy that’s “okay with STR” can work — until there’s a gray-area claim. The biggest issues I see aren’t total-loss catastrophes. They’re things like:

• Guest-caused damage that isn’t clearly vandalism
• Liability claims where coverage interpretation gets tricky
• Loss of income disputes after partial damage
• Carrier non-renewals after a claim because STR wasn’t their ideal risk

Guest-caused damage that isn’t clearly vandalism

Liability claims where coverage interpretation gets tricky

Loss of income disputes after partial damage

Carrier non-renewals after a claim because STR wasn’t their ideal risk

Airbnb/VRBO coverage is helpful, but it’s secondary and conditional. It’s not a true replacement for primary coverage — especially when it comes to business interruption, liability nuances, or defense costs.

Now- is Proper (or a similar STR-specific policy) worth $1,500 more per year?

It depends on:

• Your risk tolerance
• How leveraged you are
• Whether you could comfortably self-insure gaps
• How much time and stress you’re willing to absorb in a claim dispute

Your risk tolerance

How leveraged you are

Whether you could comfortably self-insure gaps

How much time and stress you’re willing to absorb in a claim dispute

If you truly could absorb lost income and a mid-sized claim without it impacting you materially, then yes — layering a standard policy + platform coverage + umbrella can be a strategic cost decision.

But here’s the bigger question I’d ask you:

If you had a $75k–$150k gray-area claim, would you want to be negotiating coverage — or focusing on recovery?

For many of my clients, the premium difference ends up being about buying smoother claims handling and fewer unknowns.

If you’d like, I’d be happy to:

• Review what you’re currently carrying
• Identify potential exposure gaps
• Run a quick scenario comparison so you can see where the real differences are

Review what you’re currently carrying

Identify potential exposure gaps

Run a quick scenario comparison so you can see where the real differences are

No pressure either way — just making sure you’re making a decision with full clarity.

Out of curiosity, how many doors are you operating right now?

John Underwood · Answer

Don't count Vrbo/Airbnb as insurance.

You must have STR insurance or you may be denied a claim.

There are cheaper insurance companies that can provide comparable STR insurance such as Foremost or USAA.

Make sure your umbrella covers your specific STR property. Check with your agent. Umbrella insurance is great to have.

Collin Hays · Answer

I wouldn't count AirBNB and VRBO insurances. If those paid off, it would be a surprise, and a bonus. I've never found Proper to be worth the extra expense. It all depends on how many things you want to be insured for.

Mike Grudzien · Answer

Been happy with Foremost for years!

Jon Martin · Answer

As long as the coverage itself is sufficient and the carrier is okay with what you are doing it doesn't really matter.

I had one policy with Proper and was always please with the ease of getting a representative on the phone. That said, with recent quotes I've gotten they charge way too much for larger properties with more risk factors.

Owen Rosen · Answer

I'm an agent representing multiple providers including Steadily and I'm very happy with their LTR and STR offerings.  They do a good job of having products for most 1-4 unit dwelling situations.

Specific STR Insurance Worth It?

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