Short Term Rental Insurance – Proper
When it comes to selecting your homeowner’s policy, it’s important that your insurance provider knows you plan to short term rent the home. This is a common exclusion on policies and the greatest risk for homeowners. There are several insurance providers who offer products specifically for short term rental owners. Proper has been the industry leader for years and was the first company to develop a product for this space. Allstate now has its own package called HostAdvantage that is similar to Proper. We elected to go with Proper so I have more information about their coverage.
Proper Insurance covers personal & commercial use: Most vacation rental owners have “triple use” of their vacation rental; being used as a personal vacation home, commercial short-term rentals, and periods of inoccupancy. With trademarked endorsements, the Proper policy covers you and your property for all three uses. Think of it as a homeowner’s policy, a landlord policy, and a business policy all wrapped into one.
Commercial homeowner’s insurance for vacation rentals: Homeowners and landlord insurance policies exclude “commercial activity”, which means any property or liability claim could be denied as the result of short-term renting your property. New regulations across the U.S. are also requiring property owners to maintain commercial general liability. The Proper Insurance policy is a comprehensive commercial policy and was custom-penned with Lloyd’s of London to entirely replace your current coverage.
Proper Insurance Policy Highlights: Designed to replace your current coverage.
Commercial Package Policy: coverage for building, contents, liability, and income.
Building & Contents: special cause of loss (all risk) with replacement cost valuation (new for old).
Liability: $1,000,000/$2,000,000 in commercial general liability (extends beyond premise with no deductible)
Income: actual loss sustained business income coverage with no time limit.
Additional $1,000,000 in personal liability when rental “doubles” as primary residence.
Optional upgrade to $2,000,000/$3,000,000 in commercial general liability.
Liability coverage enhancement for animals/pets & liquor.
Liability coverage extended over amenities: pools, bicycles, small watercraft, golf carts, rec area, + more.
Property coverage enhancement for theft and damage caused by a renter.
Vacancy clause removed with no standard occupancy restrictions.
Ordinance or law enhancement up to full building limits.
Bed bug enhancement with business income.
Underwritten by Lloyd’s of London, AM Best’s Rated A.
HomeAway® Endorsement: HomeAway, a world leader in vacation rentals has recognized and endorsed Proper Insurance as its preferred vendor for comprehensive insurance. This endorsement is a testament to Proper Insurance coverage and claims service provided.
As part of your contract with SoHo Stays, LLC you must carry the correct homeowner insurance. Your home policy must list SoHo Stays, LLC as “additionally insured”, and proof of this must be submitted via a “certificate of liability insurance (COI)” document. Once the
COI is received, SoHo Stays, LLC may begin renting your home. SoHo Stays, LLC requires the certificate be provided annually. SoHo Stays, LLC must be listed as follows:
SoHo Stays, LLC
286 W 3375 N
Lehi, UT 84043
Q: Is being listed as “additional interest” the same as “additional insured” on the policy?
A: No, being added as “additional interest” does not extend or provide coverage, only “additional
Q: What does additional insured mean?
A: Additional insured refers to anyone other than the policyholder who is being afforded liability coverage in the policy. As your management company, we could be brought into a liability claim from a guest regarding your property, i.e. “slip and fall”. Therefore we require to be added as additionally insured, however we do highly recommend you purchase a policy with Commercial Liability for better overall protection which will automatically include our management company to the coverage.
Q: Since SoHo Stays, LLC is listed as additional insured, does that mean that SoHo Stays, LLC can make changes to my policy?
A: No. As additional insured, we are not able to make policy changes.
Q: Does SoHo Stays, LLC carry insurance?
A: Yes, we carry $1M of our own liability insurance.
Q: I own a condo and our complex has a master policy; do I still need my own policy?
A: Yes, master condo policies do not cover the interior of your condo nor any betterments and improvements you make to your unit. It’s your responsibility to cover the “walls in” of your condo, plus the liability within your actual condo unit.
Q: What if my insurance company won’t list SoHo Stays, LLC as additional insured?
A: This is rare, but if an insurance company will not add SoHo Stays, LLC as “additionally insured” then you likely do not have the appropriate insurance for a short-term vacation rental property. It’s imperative your insurance carrier understands the use of your property and the relationship between you, your property manager, and frequent short-term rental guests. You do not want to be at risk of a property or liability claim denial. Below are a few contacts of insurance brokers who specialize in short-term rentals.