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.

No.  The Proper policy is designed to fully replace the current coverage you have.  You would cancel your current policy.
Yes.  The Proper policy covers single family homes, condos, duplexes, town homes, and more.  It does not require the property to be defined as a vacation rental/short-term rental etc.
Personal liability is found on homeowner’s policies.  It covers you for personal negligence and follows you anywhere you go in the world.  It’s very important to carry personal liability.  This is why Proper adds it to our policy in the event your short-term rental doubles as your primary residence.  There is no reason to add it in the event you carry a homeowner’s on another residence, as you would be “double insured”.
No.  The same “business activity” exclusions apply as it’s personal.  However, standard personal umbrellas do cover over a long-term landlord property as they do not constitute a business.
A commercial umbrella is a policy that covers “above and beyond” a standard business policies liability limits.  Since the Proper policy is a business policy and carries $1,000,000/$2,000,000 in commercial general liability, it does suffice as the underlying policy for a commercial umbrella.  Proper has the ability to increase this base limit to $2,000,000/$3,000,000.  Contact your Proper representative to get pricing and information.
Yes.  In fact, Proper encourages this.  Since your short-term rental is a business it’s always smart to incorporate.  We can write your policy with the named insured as an individual, partnership, LLC, Corp, or Trust.
In order for an insurance company to be profitable it must collect more premium than it pays out in claims.  Most insurance companies see short-term rental properties as “high risk”.  Lots of foot traffic and unknown variables.  They simply don’t want to take on the risk.  With the help of Proper, Lloyd’s of London understands the risk and is willing to insure it.  Note:  Lloyd’s of London has been underwriting for over 325 years.
Proper believes in education first.  We want to answer any and all the questions you have.  Please contact us by email, or call 888-631-6680.  We look forward to working with you!