A Case Study: “Business Income – Property Managers Commission”

Proper Insurance Covers Vacation Rental Property Managers Commission

Some vacation rental managers may have heard about our trademarked insurance endorsement titled “Business Income – Property Managers Commission,” but very few understand exactly how it works.

Teresa, the owner of Mountain Laurel Cabin Rentals (MLCR), and one of her owners Sol were kind enough to let Proper use a recent insurance claim as a case study to highlight how this first-of-its-kind endorsement works.

But first, for anyone not familiar with Proper, let’s give a quick 101.

Vacation Rental Insurance Backed by Lloyd’s of London and Concert

With the backing of Lloyd’s of London, we developed a first-of-its-kind insurance policy tailored for short-term vacation rental owners. The policy replaces the property owner’s current coverage, which is typically a Homeowners or Landlord policy written for a different use.

Essentially, it’s commercial homeowner insurance. The problem with insuring vacation rentals lies in occupancy, as virtually all have triple-use.

At times throughout the policy period, the property is likely used personally by the owner or friends, at times or most of the year, it’s used as a short-term vacation rental, and at times it may even be unoccupied for days or weeks. This multi-use is what breaks insurance contracts down and creates gaps in coverage.

Technically, the owner should carry two or three separate policies. However, because of Proper’s trademarked endorsements, we offer one policy that covers the building(s), contents, income, and liability, regardless of occupancy.

Case Study: Mountain Laurel Cabin Rentals

When vacation rental managers refer Proper, not only do their owners get coverage built for short-term rentals, but managers are automatically covered under the owner’s $1,000,000 of commercial general liability, and the PM’s commission or business income can also be covered as long as their PM contract specifies as such.

Sol is insured with Proper, and her vacation rental is managed by MLCR. She recently filed a wind & hail claim in which some trees fell and damaged her outside deck and stairs. Because of the property damage, she also lost income as her property could not be rented for 60 nights during the repair period.

The property lost $8,400 in income. Because the management contract specified it, MLCR’s 35% commission on that lost income ($2,940) was covered under the endorsement.

The Property Manager’s Commission endorsement was first-of-its-kind when Proper introduced it. With more than 200,000 policies written, most vacation rental managers have, at minimum, a few clients insured with Proper. Please take another 2 minutes and read the actual endorsement here, which also has an explanation of “specifies as such” on page 2.

You might be asking if owners would be upset to know this endorsement existed in the Proper policy. And the answer is no. Our policy is built around coverage for short-term rentals. People feel comfortable recommending Proper for this reason- the endorsement is simply a nice perk. Hopefully, you have a better understanding of how our endorsement works.

If you are a vacation rental manager and would like to start recommending Proper, please browse our website, www.proper.insure, email us at info@proper.insure, or, better, give us a call at 888-631-6680.

Quote Your Short-Term Vacation Rental Today

Interested in a policy to protect you and your business from liability and damage claims? Backed by Lloyd’s of London and Concert Specialty Insurance Company, and exclusively endorsed by Vrbo, Proper Insurance is built on world-class insurance coverage.

Proper’s policy covers vacation homes, townhouses, condos, duplexes, cabins, cottages, apartments, and more. With expert vacation rental underwriters, we can tailor a policy specific to your short-term rental property.