A $130k Mistake: A Real Short-Term Rental Insurance Claim

A Nightmarish Start to Jason’s Story: What Happened? 

Jason owned a highly rated short-term rental property, meticulously maintained and fully booked most of the year. But one weekend, a small mistake escalated into a $130,000 nightmare.  

During a power outage, his guest left a kitchen faucet in an on position with the sink stopper in place. When the power came back on hours after the guests had checked out, so did the water, and it kept flowing. The tap ran hot water for more than five hours, flooding the main floor and the fully finished basement below. 

The damage was devastating: 

• Entire sections of hardwood flooring were destroyed as they buckled under the water. 
• The finished walls and basement needed to be gutted to the studs. 
• Drying and mitigation services were essential to prevent mold growth. 

What started as a simple oversight turned into catastrophic damage that needed thousands of dollars, hours of repair, and months of the property being unlisted.  

The Financial Toll of this Airbnb Host’s Horror Story  

Jason’s immediate financial losses extended far beyond the physical damage to the property. Here’s the actual breakdown:   

• Rebuilding Costs: Over $60,000 for repairs, from new flooring to drywall replacement. 
• Mitigation Services: Specialized drying services totaled $30,000+. 
• Lost Rental Income: Months of high-season revenue worth $30,000 evaporated as his property was temporarily removed from the market.

For any host relying on income from their rental property, such an event can be devastating. But this story took a better turn because of one crucial factor Jason had on his side: Proper Insurance. 

Improper vs. Proper Insurance Coverage   

Jason initially had a traditional Homeowner’s insurance policy that his local broker assured him could cover his short-term rental property. But when he discovered that this policy limited coverage for rental nights and excluded guest-caused damages, Jason switched all five of his properties to Proper Insurance. 

This decision made all the difference.  

“I have the best company out there. They’re going to come through. Literally everything was fine. Everything got rebuilt. Everything got covered. And then, we were back up and running 3 months later.”  — Jason, STR owner and founder of SmartStay Coaching 

Traditional Homeowner or Landlord policies often have exclusions for business activities like STRs, as well as limitations or no coverage for guest-caused damage or lost income during repairs. With Proper Insurance, however, Jason had the comprehensive protection his business deserved and the confidence to continue hosting moving forward. 

“I kept saying, ‘This is not going to break me.’ It’s nice to know that [Proper Insurance] did literally everything that we expected.”  — Jason 

How Proper Insurance Saved the Claim  

Proper Insurance was designed specifically for Airbnb hosts and vacation rental owners. Their comprehensive policy didn’t just cover the structural damage caused by the flooding; it went a step further by addressing all aspects of Jason’s property recovery. 

Here’s how Proper Insurance helped Jason bounce back:  

• Structural Coverage: After inspection, the repairs were fully covered, from replacing flooring to reconstructing walls, with no disputes or delays.  
• Content Protection: The destroyed furniture and property contents were included in the claim. 
• Mitigation Expenses: Water extraction services and mold prevention treatments were reimbursed.  
• Revenue Loss Coverage: Perhaps the most valuable feature for this short-term rental owner was the coverage for lost rental income. Proper Insurance’s payout for loss of revenue used historical and seasonal data to calculate exactly how much future income Jason would have lost during the downtime, ensuring minimal business disruptions. 

Jason could focus on the rebuild while Proper Insurance took care of the red tape. Jason credits Proper for giving him peace of mind, saying, “I don’t think I had a single pushback or point of contention with Proper—nothing contentious the entire time.” 

Hosts Should Prepare for the Unexpected with Proper Insurance 

Jason’s story is just one example of the unique and increased risks associated with managing and owning short-term rentals. Whether it’s water damage, liability for guest injuries, or lost revenue during major repairs, traditional insurance policies won’t cut it for hosts. 

Proper Insurance stands apart as a solution custom-built for Airbnb hosts, with policies addressing:  

• Guest Liability: Coverage for on-premises injuries and even incidents involving guests off the property.  
• Property Damage: Protection for both the physical structure and its contents, whether the damage results from accidents, negligence, or even intentional or malicious guest actions.  
• Revenue Loss: Safeguard your revenue stream with coverage for downtime caused by a covered cause of loss. Operating a short-term rental is more than just opening your home; it’s running a business. And like any business, protecting your investment isn’t optional if you want long-term success. 

Protect Your Rental Property, Revenue & Peace of Mind 

Stories like Jason’s highlight the importance of being prepared for every possibility. The potential for water damage, liability claims, or property devaluation could leave your rental business hanging by a thread. Having STR-specific insurance like Proper Insurance ensures peace of mind, knowing your property, revenue, and liability are safeguarded. 

Don’t Become a Host Horror Story: Get a Quote Today 

You shouldn’t wait for disaster to strike. Take the proactive step to protect your short-term rental business. Sign up for a free insurance quote with Proper Insurance today and discover how this comprehensive policy can save your rental business from potential pitfalls.  

Turning a Setback into a Step Forward: Where’s Jason Now? 

Despite the financial blow and stress of rebuilding, Jason found a way to turn his hardship into an opportunity. Leaning on his expertise as a short-term rental owner, he became a coach and consultant for other property managers. Through SmartStay Coaching, Jason now helps fellow Airbnb hosts manage their businesses smarter by: 

• Educating them about risks and proactive solutions. 
• Advising on essential tools, like STR-specific insurance, to protect against setbacks.