Homeowners Insurance for Michigan STR-House Hack

13 Replies

Hello, fellow Michigander HouseHackers!

Looking for recommendations on Home Insurance when househacking in Michigan, with a short term rental (STR)...

I was surprised to find out that USAA, my longtime insurer, doesn't cover Michigan homes with an STR. Who do you use and like, and who should I stay away from or not bother contacting. Thanks in advance!

I would talk to a local insurance broker. One thing to be aware of is that certain insurers require a minimum night stay for your STR. For example, mine is 2 nights minimum.

You could also call Proper Insurance. I've never insured through them but I have discussed a house-hack STR with them and they absolutely offered insurance for that arrangement.

Good luck!

@Chris Mury , thanks! I'll check them out. I appreciate the quick response. That's strange to me that an insurance company would dictate the terms of how you operate the STR, with a 2 night minimum. Interesting...

Originally posted by @Ethan Evans :

@Chris Mury, thanks! I'll check them out. I appreciate the quick response. That's strange to me that an insurance company would dictate the terms of how you operate the STR, with a 2 night minimum. Interesting...

I'm assuming that a 1-night stay is too risky too an insurance company. 1 night stays = parties = risk. I wouldn't do less than 2 nights anyway but to each their own. 

I insure through Proper Insurance, basically they have a blended commercial & residential insurance product. Since STR is considered a business, traditional residential insurance companies dont cover STR.

I found the same thing with USAA.  They do, however, have a partner insurance agency (American Modern Insurance) that will insure STRs.

I am using Proper on one of my properties and have found them to be a headache.  AFTER they issued my policy, they started bugging me to death about getting a certified electrician and plumber and HVAC person to certify that my house's systems were safe and done to code.  I said "no," but they required me to assure them it was all up to code.

Additionally, Proper charges a very hefty cancelation fee if you want bail and find another provider.

@Alex S. , yeah - I've used USAA for years for my banking, and home+auto insurance, but because I'm househacking, they realized that they couldn't cover the homeowners, but they could if it were a regular rental...weird.  Guess I'll take my business elsewhere!  Wow - that sounds like quite a pain for an insurance company to be requiring you to do all of that.  Good to know - I appreciate you sharing that info!

@Drew Sygit , yes - good point there.  I was clear with my insurance broker that I was going to be having a dedicated AirBnB in one of the bedroom-suites, and she found a plan that allows that.  There was an occupancy rate that they wanted me to stay under, of about 40-50% i think, but  I can still break even and make some money at that point.  I don't get to move in until September (~50 days of seller occupancy) so I've got some time to get it up and running and see what I average for occupancy.