NC - Insurance for LTR that will then be used as an STR

[Zach Sprau]

Hello, 

Hoping to get some suggestions on rental property insurance. We are getting ready to rent out our property in North Carolina so we need to change from our homeowners insurance to rental property insurance (that includes replacement/rebuild coverage on the property). 

We will be entering a long term lease with a small LLC who will then AirBnB out the property. We will have a LTR agreement with the LLC (that includes a provision for STR), and then the LLC will rent it out as a STR. Our current homeowners insurance provider does not have a product that will cover us for this situation, and the broker they referred us to seemed to be a bit stumped as well, but they are looking into it.

Does anyone have experience with this or have any suggestions for insurance companies/products in NC that would cover us for this situation?

Furthermore, what type of insurance should require the LLC to have? We've been told that for our specific property we should require them to have $100k of insurance (outside of what AirBnB provides) and that we should be listed as an interested party on the policy so we would be notified of any changes.

Thanks! 

Zach

[Rod Hanks]

Quote from @Zach Sprau:

Hello, 

Hoping to get some suggestions on rental property insurance. We are getting ready to rent out our property in North Carolina so we need to change from our homeowners insurance to rental property insurance (that includes replacement/rebuild coverage on the property). 

We will be entering a long term lease with a small LLC who will then AirBnB out the property. We will have a LTR agreement with the LLC (that includes a provision for STR), and then the LLC will rent it out as a STR. Our current homeowners insurance provider does not have a product that will cover us for this situation, and the broker they referred us to seemed to be a bit stumped as well, but they are looking into it.

Does anyone have experience with this or have any suggestions for insurance companies/products in NC that would cover us for this situation?

Furthermore, what type of insurance should require the LLC to have? We've been told that for our specific property we should require them to have $100k of insurance (outside of what AirBnB provides) and that we should be listed as an interested party on the policy so we would be notified of any changes.

Thanks! 

Zach

Not sure why you would make it so complicated I’m assuming an attorney advised you to do it this way. But you would get a policy that has the STR endorsement in the name of the property owner and add the LLC that is running the STR as additional insured or additional interested party. I would suggest at least 1 million in liability.

Since you are setting it up this way I would also suggest you setup a separate general liability insurance policy for the LLC that is running the STR which would cover all STRs that it runs. So in essence there would be 2 polices, 1 for the owner of the STR and 1 for the LLC that is managing or running the STRs. 

we have access to a couple carriers that covers STRs and would love to help.