What I Learned about Insurance - Proper vs Foremost vs AirBNB

[Anya-And-Lukas0]

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]

[Maria3600]

Here is an alternative to Slice: https://www.safely.ai/ 

They claim the following two benefits over Slice: 

1. Includes background checks (identity check, criminal history, felony, sex offender, proprietary "bad guest" list)

2. Process 95% of claims

[Tom885]

Other than Proper, does any company offer "Commercial Insurance?"

Has anyone had a claim with Proper? What was the response?

[Patrick1194]

I ensured through a Foremost because they appear to look at my rental from a business perspective. Otherwise, only other one that I know of is CBIZ.

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[Richard1855]

Yes American Modern insurance.

[Ruth425]

Tom, I claimed for a new roof from Proper after our roof was damaged by high winds. They paid up with no issues. However, our premium went up 15% the following year, and they started nitpicking my listings - they even wanted written assurance that the antique sled I had up as a Christmas decoration would not be given out to guests! I switched to Farmers, insuring with Sean Murphy in Illinois.

[Gary-And-Shoni0]

I am looking for an alternative to Proper which initially seemed like a great value when USAA would not cover us with an Airbnb in our basement apt. In year 2, the rates went from 1700/yr (same as USAA) to 2700/yr at the same time coverages were decreased, e.g., deductible went from $1000 to $2500. 3rd year premium went up again to $3250 and coverages weakened. Certainly some of this is likely related to increased risk/claims in the area, but it's starting to feel a bit like bait and switch. Would be interested if others have had similar experience and have found a better-priced alternative. Also, if you filed a claim if Proper, would like to know if they did they did a good job servicing it?

[Allison317]

We claimed a stolen bike and got full replacement value in a timely manner wit proper just a few months of joining with them. 

We have been frustrated with the sky high premiums and high year-over-year increases, so we have been looking around. We may check out some of the other companies noted in this thread.  

[Cole13]

After much research, I went w/ Proper (who is underwritten by Lloyd's).   Lloyd's has suffered large losses due to global catastrophes (hurricanes, earthquakes, etc.) and that has impacted their rate structure across all forms of insurance.  My rate has gone up significantly in the last several years and I'm now shopping insurance again.  I will say that Proper was great in dealing w/ a small claim for rain/water damage.

[Nina75]

I Use Lloyds of London as well.

[Debi76]

We use Proper insurance and frankly, I trust it moreso than any other company.

[Erinn24]

I have an Airbnb that is an entire house. To get insurance through Proper last year, they made us comply with their requirements such as putting a fire alarm in each bedroom when there was already a fire alarm outside of each door. At renewal time this year, they increased the premium $200 and have more requirements in order to renew the policy. They want railings on a wrap around porch and two stairs that are not required by code to have railings due to it only being a foot off the ground. They gave us less than a month’s notice to complete this. I am looking elsewhere because it’s becoming ridiculous. 

[Ana20477]

Facing similar issues as many hosts in this thread, where a short term rental is a part of the primary residence in California, I have spent a great deal of time looking for alternatives in between traditional carriers, that flat out do not allow home sharing and comprehensive, but very expensive and more focused on liability than homeowner needs policy options like Proper. My previous insurance agent could not offer any options to fit my needs. The only thing he could offer was through American Modern that had a time limit of 90 days per year for home sharing activities. Searching further, I came across Old Harbor Insurance agency. Their website indicated familiarity with home sharing and being able to provide solutions. One of their agents, Carlo Diaz, was extremely informative and came up with what seems to be a perfectly tailored fit of a homeowner policy with comprehensive home-sharing endorsement, written specifically for the needs of AirBnB hosts through Birkshire Hathaway coupled with an ample umbrella policy. The new cost of both homeowner and umbrella policies together is about the same that what I was paying for homeowners only, without home sharing clause or umbrella through Nationwide, so I am making a switch.

[Donald28]

I've been airbnb'ing at 55% occupancy for 1 unit... without a major issue for 3 years now. I am getting nervous. Something will eventually happen and when it does, I am screwed!

I currently pay $1400 through allstate but they dont know I do airbnb and will likely deny andy claims and drop me once they find out. 

I contacted proper yesterday and they came back with a $4400 quote! Today I called old harbor and spoke with carlo diaz and he quickly told me I should call proper. I told him I already did and he offered to look into it further for other option. I'm awaiting his call now. 

My allstate rep is also supposed to call me back about possibly adding on STR insurance ...if they even offer it? 

[Robin53]

Proper charges me $5500.  It's insane.  

[Patrick303]

Any luck with Allstate?