I know that Airbnb offers host insurance. But I also have read many articles that say that it is not enough. And that your regular home owners insurance will deny your claims because of the “ business activity exclusion ” clause. I think that for minor claims I will trust the Airbnb coverage. But it is the big claims that I am worried about. As someone who has lived through a house fire, and the ridiculous insurance battles that followed, I believe in being “over insured”. Just because you think, “it will never happen to me” doesn’t mean it won’t.
When I called to ask my local insurance company about short term rental they confined that I would not be covered under my current policy. They gave me a quote for a new policy from Foremost insurance. But it was quite difficult to get my questions answered from my local agent.
I saw that Proper Insurance was recommended on many Airbnb sites and they specialize in home owners insurance for short term rentals. My agent Graham was extremely knowledge and compared his quote with the Foremost insurance quote I had received “apples to apples.” Here are a few things I learned.
Proper Insurance offers a commercial policy. The other quote was for a Landlord policy amended for short term rentals. A few of the benefits of commercial policy is:
Commercial policy has more liability protection. $1 million vs ½ million.
The Liability protection extended beyond the main premises. For example, you provide a kayak with your rental and someone has an accident on the lake. Or a renter brings a dog and they bite a kid at the playground. Or your neighbors house catches fire because your rental house caught fire.
Includes Professional and Advertising coverage. DOesn’t sound like something I’d ever need but he gave the example of you or your house manager entering the house when they think renters are gone. They sue you for invasion of privacy.
You have Liquor liability. Technically, if you provide alcohol to guests you can get sued if they serve underage people or have an accident. For example, you leave a bottle of wine as welcome gift. Or your previous guests leave a ½ a bottle of vodka they didn’t finish and you don’t remove it. You have provided liquor to guests.
There can be a big difference between actual cash value vs replacement value. Most policies will give you cash value for your old couch that was destroyed. Commercial policy gives you replacement value.
A commercial policy gives you $25k for backup and sewer claims. Other insurance does not.
For an extra $75/mo fee you can get Law and Ordinance Insurance. For example, there are costs to rebuild your older home and bring it “up to current code”. Or some areas have a law that if 50% of house is ruined you have to tear down the whole thing. But most insurance only covers the 50% that was damaged.
The policy does not cover you for flood or earthquake. There is some coverages for jewelry but not if the loss if due to “mysterious reasons”. For example, not a specific event or theft. For jewelry and art the agent recommend a separate policy from ART Insurance Now.
Based on this I think we will sign up with Proper Insurance. I think it provide better coverage it was even a few dollars LESS expensive.
HAS ANYONE ELSE USED PROPER INSURANCE?
THis is the rep I am working with:
Graham ****
Account Executive
[Personal information hidden for safety reasons]
