Is your home (and financial future) at risk due to your Airbnb or VRBO?
Having the right insurance coverage for a vacation rental doesn’t happen automatically.
I for one am very cautious of vague assurances from a booking platform, especially when there is little available data to back up the promise. I have had to collect money from Airbnb before for guest damages and it’s not an easy process. I can’t imagine the “fun” of collecting from them in the case of a major disaster.
Years ago I spoke with an agent of a major insurance company who informed me that his company WILL ABSOLUTELY NOT cover losses related to vacation rentals, and that people who choose to do vacation rentals in their home should make sure they have coverage from another source. He also warned me that there are some companies out there who may leave room for interpretation about vacation rental exclusions, but very likely won’t pay up when it comes to a claim. Lots has changed since then and most insurance companies now understand vacation rentals, but it still pays to be absolutely clear about your use of the property and your coverages.
Owning vacation rentals can be a life-changing investment, and without the right coverage could be a life-altering risk (like, rubble falling amidst flames and people running in torn pants risk). So it pays to do a little research, shop some options, and get this right.
I have dug deep and interacted with a lot of short-term rental/vacation rental insurance companies, so thought I would share my findings with you and save you some time. Check them out and find out if one is right for you.
Referral disclaimer: With some of these companies I may receive a small referral reward when you get a quote or a policy, but that doesn’t bear into whether I list a company or not, and carries no additional cost to you.
Here are my top three:
1. Proper Insurance
Replaces your homeowners policy, and additionally offers liability insurance that covers guests while in (and even while not in!) the home, damage they do to the home, damage the home does to them (simmer down, home). When I got my coverage with Proper, and it was cheaper than my previous homeowners-only insurance. Most of the homeowners I do vacation rentals with have chosen Proper, but not all. They are very familiar with our business model and that helps, as not all companies understand the nuances of managers and tenants. My experience is that proper has the best coverage and usually the highest price, so I’d recommend getting a Proper quote first, then comparing with other sources to see whether you want to adjust your coverages and price from there.
Contact: Proper Insurance website.
2. Geico
Yep, Geico. So far two homeowners I work with have chosen Geico for their coverage. I didn’t link to their site because I couldn’t find the specific information about STR coverage there. It may be a newer or more niche product for them–it will be interesting to see if it appears center stage at some point. If you’re interested in shopping Geico you might want to simply call the Colorado Springs office.
Contact: Emilie or Rebeccah 719.960.5490 (please mention Tim Thornton/Stay COS)
3. CBIZ
CBIZ isn’t in my personal top three, but they do are worth mentioning. They are one of the older players in this space. Their prices were not as competitive for my particular needs, and the experience has just been OK working with them. It feels to me like they are a huge company that’s mostly focused elsewhere. They used to be Homeaway/VRBO’s choice but are apparently being kept on their toes by the rapidly advancing Proper who has now taken up that position. Still, I have had the owner of one of the STR properties I run choose CBIZ after shopping around, and it may be a win for you too.
Contact: 888.883.5696
Not my favorite: Slice
Slice offers by-the-night vacation rental insurance. I have used them a lot in the past. If you only rent once in a while it may be a great option. If you rent all the time it is a workflow nightmare, as you have to manually enter each stay. If you are a tenant or a manager beware. Was that too dramatic? At least, dig deep and ask a lot of questions. They likely do not cover your situation because as of my last interaction with them their policies have to be purchased by the owner. Unfortunately I learned this after buying a lot of coverage that would have likely been a complete waste and would not have paid out had something happened.
Contact: 212.380.1849
[Note: since I originally wrote this post a lot has changed so I’m republishing this updated version.]