LLC and Liability Insurance?

[Marieke48]

Hello,

We live in Los Angeles and have converted our garage into a studio apartment and plan to open it up as an AirBnB. Here's my question:

1. My AAA Homeowners insurance was clueless with regards to Short Term Rental insurance. Can anyone recommend a company that does STR insurance and that I might approach?
   
   
2. If I have short term rental insurance, should I still create an LLC to protect my personal assets? The rental is part of our primary residence, and I read somewhere that in that case an LLC would not protect me from personal liability in California. 

Thanks so much for any suggestions. 

[Ted307]

@Marieke48 

Hi! Retired insurance agent & host here, we have our insurance through State Farm. It is a landlord's policy. It covers major damage and loss of income while repairs are completed. We have a pretty high deductible to help keep premiums down to an affordable level.

You will want to talk to your agent about increasing your Homeowners' to cover your personal liability, and consider an umbrella policy. We live in Arizona now, we lived in CA about 10 years ago when I had my CA insurance license through State Farm. Things could have changed in CA since then.

[Marieke48]

Thanks Ted. I'll look into State Farm. Much appreciate the feedback.

Marieke

[Molly-and-Gregg0]

Hi.  I've pushed my insurance company to clarify the "loss of use" policy in our landlord's policy, which agents will present as something that will cover lost income while a rebuild takes place.   It doesn't.  You need to force the claims department to provide in writing they will cover what you would normally make.   They admitted to us they will only cover "booked days" income, not what you actually would make in a year, no matter how many years of records you have showing your rental earns x amount.   For this reason, I am trying to find real commercial policy (like through Proper or Wister) that will actually insure the lost income.

[Patrick3626]

Hi Marieke48,

I am in a similar situation as you with AAA insurance and was wondering how you resolved your insurance needs? AAA insurance will not insure an ADU and they will also not insure the primary home if the ADU on the same lot is used as a STR.

[Emilie]

Hi @Patrick3626,

I wanted to tag in @Marieke48 so they will get a notification of your message, and are more likely to come back and share more insights with you. Since this is a post from 2022, I would also recommend that you start a new conversation here 👈 so other hosts can advise you as well. 🙂

I hope this helps!

Emilie