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Short term rental insurance

Many Airbnb hosts have advised me that I absolutely need to get short term rental insurance, which we are looking into now. Out of curiosity, has anyone had an incident where short term rental insurance actually helped?

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It helped me get my permit!

My city requires we show at least $1M in liability coverage to get a STR permit.

You got good advice to get your own insurance. Airbnb is more concerned with guest satisfaction than whether their hosts are taken care of. If you rely on them for anything more than bringing bookings to your door and transferring payments you’ll be very disappointed.

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It will help for anything home insurance and guest related not covered by Airbnb @Rachael52.

I just got a quote of $2500 here for short term rental insurance. Read here we made about $9000 from our Airbnb. I’m not sure we can do it.

Actually, I think this would replace our homeowners insurance, we are looking into the cost now and I will post later in case anyone is interested. It would be through Lloyds of London.

Massachusetts passed a law requiring the $1 M liability coverage. This necessitated a very long process with my local insurance agent who knew nothing about the Airbnb business. I had been doing business since 2012 and frankly was probably grossly uninsured. Most residential policies have clauses noting that short term rentals are not included. I had to go to a commercial policy. It has made a huge dent in our profit and we are rethinking staying in the business. Our market will not support increasing our charge because a new tax has also been added. I also got a quote from CBIZ Innkeepers which I think is the Lexus of BnB coverage. (Debbie Fling was the agent) They really understand the business but I ended up going with my local agent.

Oddly it is very unclear who will enforce this portion of the MA short term rental law. I have spoken with many hosts who are ignoring it. Others have converted their rentals to a Limited Liability Corporation which is sometimes cheaper than hefty insurance. Ultimately I think it depends on what you consider to be an acceptable level of risk. Having been involved in a $1.4M lawsuit over a car accident, I didn’t want to take a chance.

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So, getting str insurance is $1750 more per year through a local insurance agency (carrier Lloyd’s of London). And we lose the Geico discount of ensuring car and house with the same company. We’ll probably do it.

I’m in Massachusetts to and I don’t think they are very organized yet. We did register with the Department of revenue. But I’m just concerned because when people get in any kind of accident the hospital says where did this happen. Even if we are not sued, we could lose a lot of money so I’m feeling better about our decision to get short term rental insurance.

Agents have trouble finding companies to write it in MA.

You absolutely do. And it can vary a great deal depending on the coverage you want and the deductible you’re willing to pay. Insurance isn’t there to cover you for small losses - stained bedding, a broken glass, damaged paintwork and so on, it’s primary importance, for me anyway and a lot of other hosts, is the liability aspect.

We’ve all read those stories about people claiming for ridiculous amounts because of injuries or illnesses. They really happen and there’s no reason why it can’t happen to you. Don’t even be tempted to do STR without it.

Didn’t you need to show your insurance when you got your license?

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Thank you for your input here about MA. How did you figure out which agents to contact? I feel like I’m looking for a needle in a haystack.

Before I got my homeowners insurance replaced with full STR insurance, I used a service called Slice. You pay about $5 per night and it requires you to enter guest details each time. It is less expensive if you have less than 20 nights per month booked. It also covers small damages with no deductible. But it has a lot of liability limitations, especially for bodily injury and fire.

I think I just googled short term rental insurance found a local agent. They will be covering us through Lloyd’s of London.

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I think its a really good question. Liability insurance, on average, cost around $40 / month / $1M. So the cost of STR insurance is not being driven by the liability coverage, which is fairly cheap.

I think most of the difference in price is in the removal of the exclusion from the policy which would typically prevent one having a claim that results from commercial activity. They must see this additional risk from removing this exclusion as fairly significant.

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Not always a guarantee of a good insurance company, in fact sometimes its the inverse.

Says he, who is insured with a Spanish company, via Gibraltar, and ultimately Lloyd’s of London (when abbreviated becomes LoL :slight_smile: ).

JF

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I have calls out to 4 different local insurance agents - I’ll let folks know what I find out. Sounds like Lloyd’s and Telamon might be the only ones writing policies that fit the bill for my two-family home (we live upstairs and rent downstairs.) LoL indeed!

Proper Insurance company specializes in STR, in the USA

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Our STR insurance is up for renewal next month and our current insurer’s quote has a 15% increase, despite no claims whatsoever.

My OH has been hunting around and for full STR cover (building and contents), including €1m public liability, the latest quote is circa €149 per apartment. The initial PL element was €300k which appears to be the norm in Spain and the increase to €1m cost cents.

This is with a Spanish company, so adios LoL!

Given some of the quotes I’ve seen for US hosts, I can get why folks effectively self insure, but bearing mind how litigious the US is I’m not sure it’s a good idea.

JF

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In the UK there’s about 10 companies now offering STR home insurance that came up when I searched online. Surprising to hear the market is so limited in the US?

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