Not wrong as in "they don't have it." Wrong as in their coverage doesn't match their actual operation.

Here's what I mean. A standard DP-3 landlord policy covers a property leased to a long-term tenant. The moment that same property goes on Airbnb, most of those policies have explicit exclusions for short-term rental activity. A guest slips on the stairs during a three-night stay, and the claim gets denied because the policy was written for a 12-month lease tenant.

Memphis specifically requires $1M in liability insurance as a condition of the STR permit. That's not optional. The city checks. And Airbnb's AirCover, while useful as secondary coverage, won't satisfy that requirement on its own. It has significant exclusions and only applies to platform bookings.

On the LTR side, the biggest issue I see is underinsured replacement cost. Rebuilding in Memphis costs meaningfully more than it did even two or three years ago. Materials, labor, code upgrades. If your coverage amount hasn't been updated since you bought the policy, you're likely 20-30% short of what an actual rebuild would cost.

The premium environment makes all of this worse. Tennessee is getting repriced hard by carriers. Severe weather exposure, aging housing stock, rising replacement costs. Premiums are up 20-30% across the board over the past three years, and some carriers are pulling out of the state entirely. Fewer options means less competitive pricing.

What I tell every investor I work with: budget 1.5-2% of property value annually for insurance. STR properties land at the higher end. And if you're running both STRs and LTRs, you need separate policy structures. A blended approach that tries to cover both usually leaves gaps in both directions.

The investors who treat insurance as an active line item to manage annually are the ones who don't get surprised. The ones who set it and forget it are the ones filing claims that get denied.

What's your approach? Do you run separate STR and LTR policies, or have you found a carrier that handles both well under one umbrella? Always curious how other operators in different markets are handling the premium increases.

- Andrew, Memphis TN