FREQUENTLY ASKED QUESTIONS

A short-term rental is a property rented and used for short periods of less than 30 days at a time. There are various scenarios of short-term renting– renting your primary home, renting an ADU, renting a secondary home, renting an investment property, and even renting a property the host does not own (known as re-renting or rental arbitrage).  

In the insurance world, a property rented for less than 30 days at a time is typically considered short-term. If a property is rented for longer than 30 days to one guest or group, it would be considered a mid-term rental.  Mid-term rentals have their own unique challenges that can also be accommodated by the Proper Insurance policy. 

Yes, short-term rentals are an income-generating business and can, therefore, be excluded from coverage in traditional home insurance due to business activity exclusions commonly found in those policies. Increasingly, more local jurisdictions and state-imposed regulations of short-term rentals like Airbnb and Vrbo are requiring property owners and hosts to register, purchase a business license, pay business occupancy tax, and carry commercial business liability. 

The hard truth is that many modern-day insurance agents don’t understand the fine print of the policies they are selling. Short-term rentals are especially tricky to insure as they straddle the line between a personal residence and a commercial operation, introducing massive coverage gaps and risks for the insured. Even if you add a short-term rental endorsement, also known as a rider, there are still key areas where these policies fall short.

Without in-depth knowledge of the policy, and therefore the gaps present within that policy when protecting a short-term rental, you could be sold the wrong policy. It’s ultimately up to you, the insured, to understand the policy you are purchasing for your short-term rental business.

Proper Insurance offers short-term rental insurance verification as part of our services. Please give us a call so you can better understand your current insurance policy and any gaps present so that you can decide if upgrading to a short-term rental policy is best for your business model.

Give Proper Insurance a call at 888-631-6680 to verify that you have the appropriate insurance policy for your short-term rental, including adequate limits for your business revenue, property, and liability exposure for on-and-off premises, as well as any amenities provided.

Proper Insurance specializes in protecting short-term rentals. We have the most educated short-term rental insurance agents in the nation — that’s why we’ve named them Super Agents.

They will walk you through your current insurance policy so that you can confidently understand the policy language. If you would rather ask your own insurance broker first, be certain to ask these three essential questions and then obtain written confirmation from the underwriter of your policy that you have coverage for your short-term rental exposure.

The best way to protect your short-term rental is with a Commercial Homeowners Policy specifically written for short-term renting. Proper Insurance offers a unique Commercial Homeowners Policy designed for the risks of short-term renting that protects your property (the home and its contents), liability (on and off-premises), and the revenue it generates during a covered loss.

Yes, if you carry short-term rental insurance for your property through Proper, you can also utilize the property. The Proper policy has no standard occupancy restrictions. This means the property has full policy coverage no matter who is using the property (you, family, friends, guests, etc.) or how long the property is being used (short-term, mid-term, long-term, and even periods of vacancy or unoccupied). 

Airbnb’s Aircover Damage Protection is more like a warranty program in which they will make you contact the guest for proof of what happened. If the guest says, “It wasn’t me,” and refuses to pay for the damage, etc., then Airbnb has the complete authority to decide whether to fulfill that claim on your behalf.

Airbnb’s Aircover Damage Protection explicitly states that it is not insurance, so you are not listed as insured on their protection. Unfortunately, many hosts have come to the hard realization after a claim at their short-term rental that they have no power with Airbnb’s Aircover.

Additionally, Airbnb’s Aircover does not extend off of their booking platform, so if you ever short-term rent directly or on Vrbo, Booking.com, etc. You won’t even have the supplemental hope of AirCover.  

Yes, you can absolutely be held liable for the actions of your short-term rental guests. Like any business (think Walmart or Starbucks), you can get sued for injuries or accidents that involve your business (guests), whether they take place on your property or not.

This is because when you post your property as a short-term rental online, you are inviting these people into the community. This is especially true if your online listing also advertises your property as being a safe home and/or surrounding environment.

It could be as simple as a guest falling on the street getting out of an Uber in front of your short-term rental property or more complex like your guest assaulting your neighbor or a stray dog that attacks your guest. The only type of liability coverage that responds to claims like these is the robust coverage of Commercial General Liability, which is what Proper Insurance offers.

No. The Proper policy fully replaces your current coverage. You can confidently cancel your current Homeowners or Landlord policy and replace it with the Proper Insurance policy. Proper Insurance offers the most comprehensive coverage available for your property, liability, and business revenue and is far superior to a standard Homeowners or Landlord/Dwelling policy. 

Standard Homeowners insurance is typically not sufficient for short-term rental properties. Homeowners policies are designed for personal residential use and often exclude business activities, such as short-term renting.

To address some of the liability gaps in a Homeowners policy, you can add what’s known as a “Home Sharing Endorsement” to the policy. This endorsement should only be offered if the property is your primary residence and slightly expands the coverage to include some risks associated with short-term renting, but it is unlikely to provide the full protection needed for a short-term rental.

A Homeowners policy with a Home Sharing Endorsement is weak coverage at best for a short-term rental.

All Homeowners policies carry a “business activity exclusion.” In other words, any claim involving “business activity,” like renting your property to paying guests, could rightfully be denied.  Additionally, if the property is not your primary residence, you absolutely have the wrong insurance and we strongly encourage you to call an insurance agent, share your Airbnb listing, and explain that this is not your primary residence.  

Home-Sharing Endorsements were designed and written for owner-occupied primary residences and provide minimal coverage enhancements (such as $2,500 in rental furnishings). They are not designed for a secondary short-term rental investment property where the owner does not live on-site. For a regularly short-term rented property, you need business insurance. 

Dwelling/Landlord insurance may not provide adequate coverage for the unique risks associated with short-term rentals as it was primarily designed for long-term rental properties.

Short-term rentals face specific challenges and exposures, such as higher guest turnover, which can lead to increased risk of property damage or liability claims.

A Dwelling/Landlord insurance policy will offer some level of protection, but there are gaps present in areas crucial for short-term rental operations. 

Three of the biggest limitations include: coverage that is confined to incidents that happen on your property line; limited to no coverage for damage, theft or vandalism caused by guests; low limits for income protection if your property is unable to be short-term rented during a covered loss.

Additional limitations you should be aware of are lack of coverage for special amenities (like bikes, kayaks, golf carts, etc.), inadequate liability limits, as well as lack of protection for bed bugs, squatters, liquor liability, pet and animal liability, and more. 

Personal umbrellas carry personal liability, which are designed to respond to your personal negligence as the named insured. It does not respond to business activity like that of a short-term rental.

Additionally, personal umbrellas will not respond until the base policy (like a Homeowners or Landlord policy) is completely exhausted. So, you will need to exhaust the base policies’ liability coverage for it to hit the umbrella. However, if you have the wrong base policy for a short-term rental operation, unfortunately, you will have no coverage and, therefore, never reach your personal umbrella.

Our coverage typically replaces the need for the personal umbrella (if purchased to protect your short-term rental business) because we offer Commercial General Liability coverage that has no sub-limit on medical payments, meaning that if a guest gets hurt or you get named in a lawsuit, you would have $1,000,000 to respond with the option to upgrade to $2,000,000 per occurrence. 

Yes, if the property is your primary residence, you can still purchase the Proper policy. Proper adds $1,000,000 in personal liability and $50,000 in loss of use to relocate in the event the property is not habitable. Proper Insurance provides comprehensive coverage for several short-term rental scenarios at a primary residence including detached structures, in-law suites, multi-family structures, and more. 

Proper Insurance is exclusively endorsed by short-term rental industry leaders like Vrbo. We are highly involved in several premier short-term rental industry groups and associations across the nation, ultimately earning the trust of industry leaders, property owners, hosts, and managers.

We proudly have the highest reviews and best claims experience of any insurance company in the industry. Additionally, Proper Insurance is accredited and rated A+ by the Better Business Bureau.

Unique in our authority, Proper Insurance is empowered by our underwriter, Lloyd’s of London, with not only cover holder status but also binding authority and claims administration capabilities. If you’re seeking the most comprehensive insurance policy and all-around best insurance experience for your vacation rental, look no further than Proper Insurance.

Proper Insurance is underwritten by Lloyd’s of London and Concert Insurance Group, both renowned for their financial stability and underwriting excellence.

Lloyd’s of London is A.M. Best rated ‘A’ (Excellent) and stands as a cornerstone of the global insurance market, having selected only 4,500 cover holders worldwide. Proper Insurance is proud to be one of these select few, with not only cover holder status at Lloyd’s but also unique binding authority and claims administration capabilities. This integration allows us to manage all aspects of your insurance experience — from quotes to claims — directly from our Bozeman, MT office, ensuring the industry’s best customer service experience.

Concert Insurance Group is A.M. Best rated ‘A-‘ (Excellent) was established by industry leaders with a track record of success. Though newer to the insurance scene compared to Lloyd’s which began in 1688, Concert is quickly gaining recognition for its innovative solutions and commitment to customer-centric service. 

At Proper Insurance, we believe in the power of educating our clients. We understand that insurance can be confusing, especially for short-term rentals.

We want you to understand the details of the policy you currently have so you can decide if upgrading to the comprehensive coverage of Proper Insurance is right for your short-term rental business.

During a coverage comparison, your Proper Insurance Super Agent will walk through your current policy to help you decipher the coverage it provides for your short-term rental. Our agents are experts in short-term rental insurance and can outline gaps or exclusions in other policies that, at a minimum, the insured should be aware of.

Common gaps or exclusions that we see in traditional Homeowners or Landlord policies are no coverage for business activity (like a short-term rental), no coverage for guest-caused damage, no coverage for amenities (bikes, golf carts, kayaks, etc.), and more.

If you are interested in a coverage comparison, please give us a call at 888-631-6680 or submit your information through our quote portal and we will be in touch with you.

At Proper Insurance, it’s important to us that we first educate you on the risks of your short-term rental so that you understand your insurance needs. During this 30-minute consultation with your Proper Insurance agent, we break down the complexities of insurance for a short-term rental by going beyond simply discussing the policy limits and getting into the details on coverage provided through the policy and the risks you are up against. 

Are you interested in having a coverage consultation and risk assessment with the Super Agent in your area? Please contact Proper Insurance at 888-631-6680 and ask for a coverage consultation.