STR insurance question

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STR insurance question

Mays Landing, NJ · Member since 2016 · 27 posts · 5 votes

hey guys I'm about to make an offer on my first real estate investment. ill be using it as a str. im just curious what kind of insurance policys other are using. do I just get normal homeowners and then get some kind of STR policy ontop of that? or is there an insurance just for STR that I can get that would help avoid getting a normal homeowners policy. the house is also on the water in atlantic city new jersey so I will also need flood insurance.

any insight on this would help me alot thanks.

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Joe SplitrockPro Member

Moderator

Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes

@Kyle Debiase many of the standard home owner insurance companies do not offer short term rental policies. They may cover part time STR, like renting a room while you live there, but not full time. Tell your insurance carrier exactly what the use of the property is to make sure you are covered. Using the property outside of your insurance terms can result in a claims denial. Short term rentals have the highest incidents of liability lawsuits (compared owner occupied or long term rental). That is why some carriers stay away from them.

As far as providers. I use American Modern. Others recommend Proper, but the quote I got from them was really expensive. My suggestion is work with an insurance agent that brokers multiple carriers and they can get multiple quotes. Get three quotes at least and compare what they have to offer. Make sure you have a decent amount of liability coverage. All those people cycling through can really increase risk in that area.

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Bruce WoodruffPro Member
Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
4y
This is a business so you will need commercial insurance. Do a search as this question gets asked constantly...
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Joe SplitrockPro Member
Moderator
Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes
4y
@Kyle Debiase many of the standard home owner insurance companies do not offer short term rental policies. They may cover part time STR, like renting a room while you live there, but not full time. Tell your insurance carrier exactly what the use of the property is to make sure you are covered. Using the property outside of your insurance terms can result in a claims denial. Short term rentals have the highest incidents of liability lawsuits (compared owner occupied or long term rental). That is why some carriers stay away from them.
As far as providers. I use American Modern. Others recommend Proper, but the quote I got from them was really expensive. My suggestion is work with an insurance agent that brokers multiple carriers and they can get multiple quotes. Get three quotes at least and compare what they have to offer. Make sure you have a decent amount of liability coverage. All those people cycling through can really increase risk in that area.
3 Reply
Collin HaysBusiness Member
Property Manager · Gatlinburg, TN · Member since 2020 · 3k+ posts · 4k+ votes
4y
Normal homeowner's insurance is worthless, as you are running a business from the home. If you have standard HO insurance and have a claim, they'll deny the claim. You will need an overnight rental policy. Do a google search for vacation home insurance. This type of insurance covers lost income, replacement cost, and liability.
CBIZ has a number of markets for STR insurance that they will shop for you.
Congratulations on your purchase!
[email protected]806-672-7102
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Paul Stewart
Specialist · Atlantic City NJ · Member since 2018 · 114 posts · 50 votes
4y
@Kyle Debiase Hey Kyle STR owner and STR property manager here in Atlantic City. You need insurance specific to STR coverage to get your STR permit in Atlantic City. There are local ins. Companies that offer the coverage. Some claim you do not need it that is not correct you do. It's also 100% not commercial insurance. Call Izabella Warda from Heist Insurance agency. 609 736 7215. I use her as a broker and my actual STR ins company is Johnson & Johnson
1 Reply
John UnderwoodPro Member
Investor · Greer, SC · Member since 2014 · 13k+ posts · 17k+ votes
4y
Proper, Foremost or Cbiz are the top 3.
Foremost was the best choice for me.
2 Reply
Joseph Guzzardi Jr
Rental Property Investor · Member since 2019 · 411 posts · 148 votes
4y
@Kyle Debiase what @Paul Stewart is saying is 100% accurate. There are other items that the insurance co is likely going to ask for. 1) the rental listing 2) updated certifications 3) if it's a multifamily property and other units have long term tenants will likely ask for leases and renters insurance for the tenants
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Adam Zdunek
Insurance Agent · Pittsburgh, PA · Member since 2020 · 54 posts · 22 votes
4y
@Kyle Debiase there's a lot of good advice on this thread. You will definitely need other SRT insurance. There are a handful of carriers out there right now with more carriers adding endorsements to coverage SRT since they are becoming more popular. As @John Underwood stated Proper, Foremost and CBIZ are some of the most popular. There are others that have added endorsements onto their policies (I would check with a local independent agent in your state), but Travelers started offering coverage for SRT now too. Just a heads up SRT insurance is going to cost more than standard homeowners insurance or a standard landlord policy. Proper will be the most expensive carrier out there for SRT. Your best bet is to call a local independent insurance carrier in your state to see the options.
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Kyle Debiase
OP
Mays Landing, NJ · Member since 2016 · 27 posts · 5 votes
4y
@Paul Stewart
Thanks for that Paul. Do you mind if I ask where in the city your property is located and what your paying yearly for str insurance/flood?
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Paul Stewart
Specialist · Atlantic City NJ · Member since 2018 · 114 posts · 50 votes
4y
@Kyle Debiase so r
I run 20 STR properties all over the city. The STR unit I own is located in back area of Bungalow Park. My property is a 2004 build and raised to fema specifics so I actually only pay like 370$ a year.. most people don't have the situation i have with flood ins due to year built and being built to Fema specifics
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Kyle Debiase
OP
Mays Landing, NJ · Member since 2016 · 27 posts · 5 votes
4y
@Paul Stewart
okay gotcha thats paul. do you run any properties in the inlet area around gardeners basin if so how do they do? specifically in the winter months?
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Adam David Graning
Rental Property Investor · Minneapolis MN (minneapolis, mn) · Member since 2020 · 50 posts · 28 votes
4y
@Kyle Debiase I use travelers, they're the only affordable insurance company that would cover either of my STRs. There are STR specific insurance companies but they will charge around double.
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Mike Shemp
Rental Property Investor · Stewartsville, NJ · Member since 2016 · 418 posts · 280 votes
4y
When I compared Proper vs. more traditional homeowner insurance policies that said they covered short-term rental activity...I found that they did not provide as much coverage as Proper.

Proper is more expensive, but I prefer more coverage than less.
Mike
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Justin Sullivan
Real Estate Agent · Phoenix, AZ · Member since 2019 · 158 posts · 140 votes
4y
@Kyle Debiase
Contact flood simple for the flood insurance. Keep in mind with a flood insurance policy you can’t cancel for any reason other then selling the property or the mortgages company says you don’t need it anymore(which won’t happen in AC.) so you can’t get a policy and shop around for cheaper. I am not sure about when the policy ends if you can change carriers or not but I know your stuck with that company for a year and flood insurance is expensive!!
Contact mike and bob from Atlantic insurance services. They do all my jersey insurance for all my properties and they're great people!! As for the STR I am not sure about that. I would speak with mike and an attorney for the best answer.
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Keven Vanegas
Rental Property Investor · South Jersey, NJ · Member since 2016 · 124 posts · 58 votes
4y
Hey @Kyle Debiase! You will need STR insurance to run one in AC. You will need proof when you submit all of your documents for your rental permit. If you have any specific questions about the market in AC or want to get into the numbers let me know!
Flood insurance is a requirement for anything in AC if it isn't raised and you are mortgaging it. So I would get a homeowners policy that will have an STR inclusion & flood. Im here if you need anything else!
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Kyle Debiase
OP
Mays Landing, NJ · Member since 2016 · 27 posts · 5 votes
4y
@Paul Stewart
hey Paul do you only rent for a week or more at a time? heist insurance told me all of their carriers require atleast a week stay or more
0 Reply
Keven Vanegas
Rental Property Investor · South Jersey, NJ · Member since 2016 · 124 posts · 58 votes
4y
@Kyle Debiase The average stay in AC is 3-4 nights. During the off-season, you may get long-term stays of 30+ days. I would keep shopping around
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Paul Stewart
Specialist · Atlantic City NJ · Member since 2018 · 114 posts · 50 votes
4y
@Kyle Debiase ask for Izabella Ward. Some of the reps are not very seasoned and don't know what policies are what.
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Kyle Debiase
OP
Mays Landing, NJ · Member since 2016 · 27 posts · 5 votes
4y
@Keven Vanegas
this is by far the most difficult thing I've ran into thus far with trying to get into Str. I can't find anybody to cover me
0 Reply
Kyle Debiase
OP
Mays Landing, NJ · Member since 2016 · 27 posts · 5 votes
4y
@Paul Stewart
I talked to Izabella she said that this is true. stays ha e to be longer than 1 week
0 Reply
Kyle Debiase
OP
Mays Landing, NJ · Member since 2016 · 27 posts · 5 votes
4y
@Keven Vanegas
hey keven what company are you using for insurance in ac. I've called so many places and nobody can help me im getting desperate lol
0 Reply
Keven Vanegas
Rental Property Investor · South Jersey, NJ · Member since 2016 · 124 posts · 58 votes
4y
@Kyle Debiase I've used NREIG for my rental insurance. Im in the process of launching two of my own STRs so I havent begun to shop yet but I just reached out to my rep to ask. I have huge clients that we manage for so I will also ask who they use. I'll get back to you once I know :)
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Kyle Debiase
OP
Mays Landing, NJ · Member since 2016 · 27 posts · 5 votes
4y
@Keven Vanegas
Keven that would mean so much to me thank you!!!
0 Reply
Paul Stewart
Specialist · Atlantic City NJ · Member since 2018 · 114 posts · 50 votes
4y
@Kyle Debiase yeah I'm out of town right now so can't give you the specific policy. She's probably not understanding what you need. You can also try to call Neptune insurance directly. Or just Google generic STR insurance coverage.
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Joe SplitrockPro Member
Moderator
Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes
4y
Originally posted by @Kyle Debiase:
@Keven Vanegas
hey keven what company are you using for insurance in ac. I've called so many places and nobody can help me im getting desperate lol

Post a list of companies you called. Not brokers, but actual insurance companies that provided bids. There is no point in people suggesting companies you already tried.
Also be aware of the difference between brokers and agents with a specific company. For example, a State Farm agent can quote State Farm. A broker works with many different companies and they can shop around for you.
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Zigmunt Smigaj
Rental Property Investor · Colorado Springs, CO · Member since 2014 · 47 posts · 10 votes
3y
Quote from @Adam David Graning:

@Kyle Debiase I use travelers, they're the only affordable insurance company that would cover either of my STRs. There are STR specific insurance companies but they will charge around double.

I called Travelers, they dont insure any kind of SFH, Condo, Townhome FL. Do you have your policy as a business or something else?
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