Santa Rosa Beach, FL · Member since 2018 · 81 posts · 67 votes
Hello everyone! WE have purchased our first short term rental that we are using as a vacation rental and are currently living in it while we renovate it and get it ready. We will be renting it out starting this July and I am doing some research on what type of home insurance is the best.
Most of the articles I find come from expensive insurance companies blogs so I don't feel like I am getting an unbiased answer in my research. So I wanted to ask on here and see what you all think.
I’m interested in this too. We also just purchased a short term rental and our homeowners insurance is rated for short term rental. However, I’m wondering if I need more than this? I know that Airbnb, which we exclusively use, also has insurance.
@Tirza Wibel I didn’t know Airbnb has insurance. We are using them and also direct booking with our lodgify website so I need to have other options for those bookings. What insurance do you use now?
You need an insurance policy that specifically has coverage for short term rentals. Talk to your insurance agent to be sure you have the right policy. You might consider "Loss of use" coverage that will keep your income stream if something happens to the property, like a fire. In my opinion, you want a minimum of $1 million in liability coverage and another $1 million umbrella policy.
@Courtney Radmall Proper or CBiz. This question comes up about once per week search the forums you’ll find all kinds of info but just give proper a call :)
Good recommendations from Jon Crosby (Foremost Insurance) and Lucas Carl. If your insurance policy does not offer sufficient coverage for short-term rentals, I recommend Comet home insurance. I have researched Comet, CBIZ and Proper Insurance. They seem to offer similar products, but Comet offered me a better price. Good luck!
@Courtney Radmall we have proper for all of our STRs and while pricey, we feel it is comprehensive. This is a very specific commercial policy for STR and I would not suggest going with anything less.
Congrats on your new purchase & project! Where is it?
@Anthony R. we purchased our first investment in orlando area. We are currently living it and renovating it and will have our first renters at the end of June. What is the monthly cost for Proper? I know it probably differs depending on the property and coverage but just a ball park would be helpful to know.
I use Proper insurance for my short term rental. Other insurance companies I looked at limit the amount of short term rentals to 2 or 4. One also required short term rentals to be 30-90 days in length, which is tough when trying to rent weekly.
Proper offered the correct coverage which allows many short term rentals, includes loss of use and commercial liability. The one downside is they are on the pricier side.
Make sure to talk to different companies to ensure you are getting the coverage you need.
My experience in Gatlinburg, Pigeon Forge area was to find a local insurance provider. I did have to make a few calls but since the area is focused on 2nd home and Vacation Rentals it wasn't long before I found Farm Bureau surprisingly had a plan that met our needs. If where your vacation rental is located is an active vacation market it will save you the higher prices charged by other commercial policies?
A lot of local insurance companies will require that your primary be in the same state as the vacation rental you want to get a policy on, so watch for that. Farm Bureau is a great example. I referred a few out of state clients to the local Farm Bureau here and they couldn’t insure them because their primaries were in other states (they also don't cover theft).
I would go with one of the major STR-specific companies. They have a lot of really well though out elements that are specific to vacation and short term rentals that smaller companies can't compete with, such as loss of income due to bedbugs (Airbnb can require you to shut down for a few weeks if a guest reports bedbugs, happened in one of our vacation rentals).
But of course, you just have to choose the company that works best for you. The majority of my clients use Proper and CBiz and have been happy with them. I'll definitely be following this thread for some other suggestions though!
Smart move thinking about the right insurance. We recommend Proper Insurance to all our STR and Airbnb-seeking clients in Denver and Colorado Springs. We also use Proper for our own short-term rental in the Springs. Their coverage areas are great and they're underwritten by Lloyd's of London and can be trusted. It's worth the peace of mind.
Good advice here and is fairly location specific. we use FOREMOST and, so far, have been satisfied. They have a good reputation in TN as one of the few providers that stepped up during/after the wildfires and also continued to write policies here without huge increases.
We offer a hybrid option for STR owners and managers. Get $10k in home contents coverage from My Property Protect for $5/nt, then get Gen Liability/Structural with a high deductible from Martin Burlingame at @Bigfoot Insurance. Between the two policies it creates comprehensive coverage and can typically save Hosts hundreds $ each year.
@Anthony R. we purchased our first investment in orlando area. We are currently living it and renovating it and will have our first renters at the end of June. What is the monthly cost for Proper? I know it probably differs depending on the property and coverage but just a ball park would be helpful to know.
I am interested to learn more about the purchase of your first STR in Orlando. I live in Orlando and have been considering STRs.
@Jay Weathersby yes of course. Feel free to message me and ask me any questions. We did a ton of research on the area and spoke with several people doing it successfully in Orlando and pulled the trigger. We are really excited and already have 5 bookings and we will be done renovating it at the end of June.
Hello everyone! WE have purchased our first short term rental that we are using as a vacation rental and are currently living in it while we renovate it and get it ready. We will be renting it out starting this July and I am doing some research on what type of home insurance is the best.
Most of the articles I find come from expensive insurance companies blogs so I don't feel like I am getting an unbiased answer in my research. So I wanted to ask on here and see what you all think.
Thanks in advance!
I’m curious what insurance deductible people here have been getting. My quote from Proper doesn’t have much difference in premium for $10k deductible vs $1k deductible, thus making me inclined to get the $1k deductible for max safety. But then the ultimate question becomes - if you have a $1k deductible - do you find yourself filing claims for small-ish amounts like $1200 frequently? And do your premiums rise if you file too many claims?
Finally, I’d like to add to this discussion by mentioning that insurance is a very important asset and you shouldn’t just jump on a company bc the insurance benefits sound great or the quote sounds great. The most important thing when choosing insurance is the stability of the insurer. After all, a low quote or great benefits are worthless if they can’t afford to pay out when you need it the most!
Good responsible insurers are well diversified with policies written all over the country. Smaller insurers may be over-concentrated in one area. And for example if that area is North Carolina, they may go bankrupt when a hurricane hits NC & does billions of dollars in flooding damage across the state.
That said, I’d recommend everyone go to AMBest.com and check the rating of your insurance company before signing up for insurance. It’s free and takes about 10 seconds on AMBest.com. AM Best has been rating insurance companies since long before your house was even built. Probably. They’ve been around since 1899.
Anyway, Proper is backed by Lloyd’s of London which is highly rated for financial stability by AM Best. All of the big insurers (Geico, Nationwide, USAA, etc) receive AM Best ratings and have for many, many years. Some of the other companies mentioned on this thread are so new that they don’t appear when you search on AMBest.com - I would be wary of using those insurers unless they are backed by a highly-rated underwriter as Proper is. Just my 2 cents. Better to be safe than paying thousands of dollars in premiums to an insurer that later goes bankrupt when you need them the most.
I suspect the avg owner is making very very very few claims. I am more worried about actual cash value vs. the other. Replacement of lost revenue. etc.
Curious, you already have bookings and the property hasn't been renovated yet? Are your pictures of the existing unit? We have investigated STR a bit and it seemed most platforms required some amount of pictures before getting the listing live.
@Jerry N. it was fully furnished and rented out from the previous owner before we bought it so we used the current photos to list it and then we will update it with even better photos after. Only one of our bookings asked specifics about it but we are going to send our guest the new photos once we are done renovating in a few weeks.