Frequently Asked Questions
In the insurance world, a property that is rented for less than 30 days at a time is typically considered short-term. Short-term can also refer to a property in which the renter does not reside/live at the dwelling. Short-term rentals can be found on websites like HomeAway®, Vrbo®, Airbnb®, TripAdvisor, Vacasa, and many more. Many traditional home insurance carriers have denied coverage on a claim if short-term renting was not disclosed by the insured, see Emily Richer Vs Travelers Insurance – July 2017
An insurance agency is an office that is licensed to sell insurance products. Proper Insurance Services, LLC is a licensed insurance agency incorporated in the state of Virginia.
Insurance is a three party transaction. There is the insured (you), the insurance agency (Proper Insurance), and the insurance company (underwriter). The insurance company pays the claims. The Proper policy is underwritten by Lloyd’s of London and has a financial strength rating of A by AM Best. Lloyd’s has an excellent reputation for claims paid and is considered premier in the industry. They founded modern insurance over 325 years ago.
All homeowner’s policies carry a “business activity exclusion”. In other words, any claim involving a “business activity” could rightfully be denied.
Yes. More and more cities like Austin, Santa Barbara, New Orleans, Nashville, and Chicago are now requiring short-term rental owners to carry a business license and carry $1,000,000 in commercial liability. Communities are also putting in requirements for occupancy tax collection, like a hotel. None of these requirements exist for a long-term lease rental.
Landlord policies carry a “business activity” exclusion. This is because these policies are written for landlords, not business owners. A long-term lease rental is not a business. Let’s use a liability example: A renter leases your home for six months. Two months later he/she “slips and falls” in the shower because there is soap scum built up on the tub floor. Does this liability fall on the landlord? No, of course not, it’s the tenant’s responsibility to keep a clean tub. Now, the same scenario; a vacationer rents a home for a week. You better believe it’s the property owner’s responsibility to keep a clean tub. The vacationer assumed they were renting a clean/safe property. No different than a hotel. The liability falls on the property/business owner.
You purchase business insurance. The Proper Insurance policy is a business policy. It covers your business property (rental home/contents), business liability, and the business income it generates.
Yes. There are no standard occupancy restrictions on a business policy. This means the property is insured while you stay there, friends/family, and of course paying guests.
Yes. If the short-term rental home is also your primary residence, Proper simply adds $1,000,000 in personal liability and $50,000 in loss of use to relocate in the event the property is being rebuilt. This is very important if you do not carry a homeowner’s policy elsewhere.
Yes. You have the same business exposure. We see every scenario imaginable. You live upstairs and short-term rent the downstairs. You live in the main home and rent out the guest house, etc.