Investor · Brooklyn, NY · Member since 2019 · 185 posts · 205 votes
Hi, everyone. Most of my experience lies in the longterm rental property world, but we just picked up a short-term rental in Vermont and are going through the process of getting it ready to go.
The property cost about $415k, and my insurance quote for homeowners + liability was about $4k, which seemed high to me.
Obviously insurance quotes vary greatly by policy, but wanted to get a sense as to what others were paying and what provider they used.
I am used to long-term rental policies, which seem to be less expensive.
Investor · Colorado Springs, CO · Member since 2011 · 322 posts · 238 votes
5y
I use Proper insurance, unwritten by Lloyds of London, for my STR - covers the extra issues you would expect from an STR like vandalism, alcohol liabilities, business interruption up $10k, hot-tub cooties etc. It's a commercial policy so I pay a little extra but vey much worth the expense. I made a fair size claim last year and it paid off pretty painlessly except for the 90 day lag. highly recommend them.
If I had used a regular home owners policy with and STR addendum I'm pretty sure it would not have covered my particular issue.
Insurance Agent · Pittsburgh, PA · Member since 2020 · 54 posts · 22 votes
5y
Hey Brian,
Yes, the short term rental will be 2-4 times higher than your standard homeowner insurance and higher than a standard long term rental. There aren't a ton of carriers that have jumped on board in writing STR.
Not 100% sure the carriers in your specific state, but I know that Proper will write in all 50 states. They are one of the highest premiums when it comes to STR, but also have a very good policy too. As stated on here you can look to Foremost as well. They will cover STR houses. You can also check with a local independent insurance agent to see if any carriers that might not have been mentioned have a short term rental endorsement that they can add to a standard landlord policy (Travelers does in the states I write in). You will want to read the policy language to confirm there isn't an exclusion for STR.
Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
5y
My company for my personal house covers my STR very reasonably. State Farm, about $1400 yr. Not sure of all of the coverage parameters but it is listed as commercial and vacation rental.
Property Manager · Columbia, SC · Member since 2017 · 121 posts · 163 votes
5y
We've been using a Travelers Landlord Policy with a short term rental endorsement. The product isn't quite as comprehensive as Proper but it is significantly cheaper and I feel comfortable self-insuring the gaps with our own emergency funds and relying on AirBNB & VRBO claims.
Rental Property Investor · Arlington, TX · Member since 2016 · 706 posts · 611 votes
5y
Escrow a regular homeowners insurance policy and then lease your property to an LLC. Put a proper insurance policy on the LLC. Gives you double protection if something breaks from a direct booking and triple protection from a guest coming in through an OTA. Proper is expensive but worth it. They have a loss of income protection, etc.
Insurance Agent · Norwalk, CT · Member since 2016 · 2k+ posts · 1k+ votes
5y
Brian,
Because VT is a traditional rental market (ski houses), depending on the minimum duration you will be allowing for rentals (ie. monthly, Weekly, etc.) there are some regular carriers in the New England Market that will write it. So if you are not doing daily rental, have your agent check with some of the regional carriers and see how they compare.
Investor · Brooklyn, NY · Member since 2019 · 185 posts · 205 votes
5y
Closing the loop on this for everyone. I ended up going with Proper. They were more expensive, but really know what they are doing in the STR space and we were much more confident with their proposal than the cheaper one we got from our usual broker who had less experience with STRs.
Rental Property Investor · Nashua, NH · Member since 2014 · 598 posts · 477 votes
5y
@Brian Kantor late to the party, but the $4k/year quote definitely seems excessive and hope you did better with Proper. As comparison SF got my southern VT 3BR/2BA STR covered at < $1k/yr for 2k/500k + umbrella (albeit with bundled discounts in play). MetLife was actually even more affordable in VT. I think Jerry Farnum in Springfield's still their point of contact on new quotes if/when you need them down the line.
Is it a good idea to keep my homeowners insurance while obtaining a STR insurance? Also I will be renting out my condo as a mid term rental (to travel nurses) does STR insurance fall in the same category or is that a whole different policy?
Is it a good idea to keep my homeowners insurance while obtaining a STR insurance? Also I will be renting out my condo as a mid term rental (to travel nurses) does STR insurance fall in the same category or is that a whole different policy?
There are definitely people with more experience than I have, but from what I understand, Proper insurance (and probably other companies) will cover like a commercial policy, as well as a personal property for your own personal use. At least that's how the policy we got works for our STR. I defer to the others with more experience than I, though.
Escrow a regular homeowners insurance policy and then lease your property to an LLC. Put a proper insurance policy on the LLC. Gives you double protection if something breaks from a direct booking and triple protection from a guest coming in through an OTA. Proper is expensive but worth it. They have a loss of income protection, etc.
Thanks for sharing this.
I am currently under contract for home I'm planning on using as a short term rental. I used a conventional loan and was planning on transferring the deed over to my LLC. Is what you mentioned (lease your property to an LLC) a good strategy to avoid transferring my deed to my LLC and avoid the possibility of the bank calling my note due?
Real Estate Agent · Boulder, CO · Member since 2015 · 285 posts · 226 votes
4y
I've found American Modern to be as affordable as long term insurance and I have never had to lean on my insurance for a short term claim, I've always gone straight to Airbnb or VRBO.
For Medium-term rentals, I just use a regular long-term rental policy since it's over 30 days. Another plus for Medium-term.
I've found American Modern to be as affordable as long term insurance and I have never had to lean on my insurance for a short term claim, I've always gone straight to Airbnb or VRBO.
For Medium-term rentals, I just use a regular long-term rental policy since it's over 30 days. Another plus for Medium-term.
Thank you for the tip much appreciated!
Since I'll be doing both STR & MTR on the same condo, would regular long term rental insurance be fine along side with the VRBO/air BnB insurance that they offer ? How would you do it and why?
STR insurance is usually higher. Check with Proper...
Just a little note about Proper. I originally gave them a good review because of their STR policies. Expensive, but comprehensive.
BUT....They just canceled my policy because the property had cloth-covered wiring (like most 1951 houses do). That is an expensive mistake that will follow me til I die.
Yes, the short term rental will be 2-4 times higher than your standard homeowner insurance and higher than a standard long term rental. There aren't a ton of carriers that have jumped on board in writing STR.
Not 100% sure the carriers in your specific state, but I know that Proper will write in all 50 states. They are one of the highest premiums when it comes to STR, but also have a very good policy too. As stated on here you can look to Foremost as well. They will cover STR houses. You can also check with a local independent insurance agent to see if any carriers that might not have been mentioned have a short term rental endorsement that they can add to a standard landlord policy (Travelers does in the states I write in). You will want to read the policy language to confirm there isn't an exclusion for STR.
Best of luck
Hey Adam! Sounds like you are in the biz----is a monthly rental (MTR) still considered a STR to insurance carriers? our tenants will stay 1-9 months typically.
Lender · Asheville, NC · Member since 2016 · 1k+ posts · 1k+ votes
3y
That rate does not sound out of line for an STR. Personally, we use Foremost and are very happy with them. I think I'm paying about $4300/yr on a $600k property but that's in western NC and rates will vary by location. Just make sure if you're paying that much for your coverage you are getting a true short term rental (commercial) policy. A homeowner's policy with a "rider" or addendum for your vacation rental won't be adequate.
STR insurance is usually higher. Check with Proper...
Just a little note about Proper. I originally gave them a good review because of their STR policies. Expensive, but comprehensive.
BUT....They just canceled my policy because the property had cloth-covered wiring (like most 1951 houses do). That is an expensive mistake that will follow me til I die.
That is not uncommon on all home owners policies. Some require inspections on visible wiring etc.