​Do you know what Short Term Rental insurance you need?

rocky 12/10/2019

As a short-term rental owner, your property is your valuable asset. In one of our recent blog posts, we share some great smart home technologies that allow you to feel at ease knowing that your property is taken care of with the best security devices while you're away. Having smart home devices like NoiseAware Sensors or security cameras installed helps you protect your property. BUT who will be the one that pays for any damages that occur to the property? Especially those that occurred before you were able to react to the alerts sent by these security devices?

Getting insurance on any of your properties should be a no-brainer for every short-term rental owner. Fun Fact: did you know that a traditional Homeowners Insurance policy is not the same as a Short-Term Rental Insurance policy?

Insurance can be confusing, especially when you tack on a new industry that is rapidly changing and evolving, like the STR industry. Finding the right insurance plan can be a pain since you want to make sure that it's actually one that fits your STR business. Many insurance plans aren't structured for short-term rentals, leaving the policyholder misinformed with an inadequate policy. Unless you are asking the right questions, you will not learn until you are trying to file a claim with your insurance company, and they inform you that it doesn't cover short-term rentals. Could you imagine getting the wrong insurance without knowing it, and when you go to use that insurance, it doesn't include the damages? Talk about a nightmare!

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We want to make finding an insurance policy simply by introducing you to Proper Insurance, one of the leading insurance companies in the industry! They have over 30,000 policies written for every state within the United States. If you have vacation homes or investment properties, whether, townhouses, condos, duplexes, cabins, cottages, apartments, etc., Proper Insurance will cover it! They are the company that you will want to have on your side when you have to deal with damages to your property.

Proper Insurance offers a comprehensive insurance policy explicitly for short-term rental property owners. It's different from other insurance providers in two ways. The first is that it's written as a commercial package policy, and second, it's written to replace the owner's current coverage entirely. What that means is the owner buys their Lloyd's policy and then cancels their existing homeowner's or landlord insurance. This is important because it then provides property and liability coverage for both personal use and short-term rental, or commercial use of the owner's property.

We believe in them so much that we've partnered with them to help protect your property from damage caused by a short term rental guest. Short term rental hosts should have peace of mind knowing their property is protected during the rental period by Proper's comprehensive Short Term Rental insurance policy. That is why we partnered together to bring you a lower premium. Not only are you paying less, but you're covered by two companies that specialize in STRs!

Let's take a look at an example of a city's noise short-term rental ordinance to see how vague and perplexing the wording can be:

"Each owner shall maintain at least $1 MM in liability insurance on the short-term rental(s) for the full duration of their license term and provide proof of the same to the city."

When we asked our friends over at Proper Insurance what they thought of this ordinance, they had three main concerns:

  • The type of "liability insurance" is not defined. While both personal liability and premise liability exclude "business activity," commercial general liability protects the insured against claims of bodily injury or property damage, they could be found legally liable. Did you know that there are three types of liability coverage for an STR?!
  • Merely stating "proof" of insurance is far too open-ended and is unmanageable for the City. Define the type of "proof" to be a "certificate of insurance (COI)" as this is a standardized form in the insurance industry to show proof of insurance to interested parties.
  • Big problem: There's no requirement to add the "City" as "additionally insured." It's common for entities to be added as "additionally insured" on to liability insurance policies, and it's through this addition that the interested entity is afforded liability coverage. It's common for entities to be added as "additionally insured" onto liability insurance policies, and it's through this addition that the interested entity is afforded liability coverage.

We recommend reaching out to Proper Insurance before starting your STR business. Not only can they answer all your questions, but they'll offer you the proper policy that will have your back when you need it the most. Arming yourself with noise monitoring and the right insurance policy will start your short-term rental business with the peace of mind that you are protected during and after your guests stay.

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