In-Depth Proper Insurance Review: Important Information (2024) (2024)

Renting out your home (or second home) to guests is a savvy way to earn some extra income. You probably already have homeowner’s insurance on the property, but if you are renting, even in the short term, regular homeowners insurance is not enough.

A fantastic option for short-term renters is Proper Insurance. They offer comprehensive coverage that replaces your existing homeowner’s insurance policy with one that includes liability and damage coverage (by classifying the rental property as a business).

Keep reading our review below to find out more about how Proper Insurance stacks up with other competitors on the market, or get your 5-minute quote right now >>

Our Proper Insurance Review: Is This The Right Insurance for Airbnb and Vacation Rental Hosts?

Proper Insurance is one of the few insurers that offer dedicated short-term rental insurance for the specific needs of hosts. Their rates are somewhat higher than an average landlord insurance policy, but you get the combined landlord, commercial, and homeowner’s coverage that is needed to properly protect your Airbnb.

As an example of Proper’s pricing, one of our Airbnb’s in Boise costs us $1,574.00 per year. This covered a 900 square foot, two bed / one bath home with a very small detached garage/ shed on a .07 acre lot. This included coverage of $1,000,000 in personal liability, and $2,000,000 in commercial general liability. With the added off-premises and alcohol coverage we felt this was a good value.

Proper Insurance Features & History:

Proper Insurance is a (relatively) new player in the short-term rental insurance game. Short-term rentals such as Airbnb, HomeAway, VRBO, and more have recently had a huge rise in popularity as a major component of the “sharing economy”.

Proper Insurance was founded by former employees of another insurance agency, CBIZ, who were looking to tap into the niche market catering specifically to short-term rental owners. They boast an impressive streamlined website with very positive client testimonials. They are also accredited by the Better Business Bureau and have received an A+ rating, which is fairly impressive for a newer company.

Getting endorsed by a major company is a huge deal, and Proper Insurance has been endorsed exclusively by two of them. Both HomeAway and VRBO, popular short-term rental hosting sites, have backed Proper.

Short-term rental owners need certain components of homeowners, landlord, and commercial insurance. Many of us own and live at the property that we rent out, so we still need personal coverage for when the dwelling is serving as a residence. We also need some aspects of a landlord insurance policy because we rent to guests who could be considered tenants in many situations.

Last but not least, we need commercial insurance because, in the eyes of the law, we are operating a business. We are collecting money in exchange for a service, and our customers just so happen to live under the same roof. Understandably, until recently most major insurance policies were ill-equipped to deal with this type of situation.

The type of policy that Proper offers is a comprehensive commercial policy. This completely replaces existing homeowner’s insurance. Unlike standard insurance that most private owners have on their homes, it grants business liability coverage. Most homeowner’s policies only grant personal liability coverage, and most landlord’s policies only grant premise liability coverage.

This comprehensive policy covers four major occupancy categories. The first is commercial, which is for when the property is operating as a business. The second is personal, for when it is simply a residence. Third is tenant, which covers owners in landlord-like scenarios, which can vary depending on local laws. Lastly, when the property is unoccupied, it is still fully covered.

There are also four “coverage areas” included in the short-term rental owner policy. The building is protected, as well as its contents. The income of the owner is insured, meaning you can receive compensation for income lost when the property cannot be rented out due to damages.

Finally, there is liability coverage for all of the four occupancy types mentioned above. You won’t be left without coverage simply because the house was empty (or full).

Proper’s baseline policy comes with $1,000,000 in commercial general liability coverage, but you can optionally add on $2,000,000 on top of that. They also do not impose limits on damage caused by a guest, theft, or vandalism. Additionally, there is no time limit on how long you can file claims for lost business income.

Both of these are great features of Proper’s vacation rental insurance. Limits on damages caused by guests could severely impact someone who had significant damage caused to their home, or even lost their home, as the result of a guest’s actions. After all, isn’t that why we have insurance in the first place?

Since Proper also does not restrict how long you can claim lost business income, hosts can feel secure in knowing that their livelihoods are protected even if they are unable to rent out their property due to damage.

Something that stood out to me is that, despite being a newer company itself, Proper Insurance is underwritten by Lloyd’s of London. Lloyd’s has over 325 years of experience in the insurance business, so they definitely know their stuff. If you’re wondering if Proper is the right choice for your short-term rental insurance needs, you can get a custom quote in just 5 minutes!

Pros of Proper Insurance: What Makes It Great?

Lost Rental Income Insured

Your short-term rental, whether it’s an Airbnb, HomeAway, VRBO, or something else, is ultimately a business. As we’ve discussed, this is why you’ll need a new vacation rental insurance policy to ensure that you’re covered as such.

While you probably enjoy running your rental property, its real purpose is to earn money. In the event that you’re unable to rent out the property for various reasons, such as due to natural disasters or damages caused by guests, your income stream would suffer.

Thankfully, Proper insures lost rental income for an unlimited amount of time. As long as you can prove that you’re unable to rent your property, your income is considered a covered loss under Proper’s policy.

This is great news, especially for those of us that use hosting as a significant source of revenue. Proper takes worry out of the equation so that you can focus on repairing your property and getting it ready for the next set of guests.

Founded By Experienced Rental Insurance Team

Proper Insurance was founded by a group of employees from their now-competitor, CBIZ. CBIZ is also an insurance provider, but they cater to a much wider group of clients and situations.

The founders of Proper wanted to create a more specialized company that serves the unique needs of short-term rental owners. As we’ve discussed, most rental owners don’t fall squarely into the categories of private homeowner, landlord, or business owner. Instead, they combine elements from all of these, which Proper understands.

No Occupancy Restrictions

Even if you use your own home as a rental property, chances are that it may not be always be occupied on a regular basis.

Most personal homeowner insurance policies mandate that the home only be occupied by the owner regularly. This would mean that short-term rental owners would not be covered, and neither would their guests.

Landlord insurance usually specifies that the property only is occupied by tenants. The legal definition of a tenant varies in different areas, but a common guideline is that a tenant is anyone who has lived at the property for 30 days or more. Again, most short-term rental owners do not have “tenants”.

Lastly, most business insurance policies are not intended for any type of residential property at all. This obviously would exclude any type of vacation rental or private home. Since Proper’s insurance is intended for short-term rental owners, they’ve encompassed all of these categories and do not have any occupancy restrictions. No matter if you live in your rental home or have never even personally been there, Proper has you covered.

Coverage Extends Beyond The Home

A big part of owning a vacation rental is creating a fun experience for your guests. Often, this includes providing outside amenities such as bicycles, canoes, golf carts, or maybe even boats. Some hosts even like to provide beverages such as local beer or wine to their guests. Under a lot of popular insurance policies, these “off-premise” amenities are not included and not covered.

If you have these amenities or similar offerings at your rental, this would leave a huge gap in coverage. This opens you up to being personally liable for damages that relate to guests using or being around these items. For example, a bicycle accident or intoxicated canoe mishap could result in you being sued if a guest gets hurt.

Thankfully, Proper offers coverage for off-premise amenities. They also have add-on liquor coverage if you want to go that route. You can’t be too careful, and accidents do happen, so I would highly recommend checking out your options if any of these amenities sound like something that you currently offer.

Cons of Proper Insurance and Complaints

Since Proper offers “three-in-one” insurance policies, their prices can be higher than some of their competitors. One of the three varieties of coverage is personal homeowner’s insurance, similar to what most private owners have on their homes.

If you are a host and you also live on the property that you rent, you will need this additional coverage. This does increase the price of the overall policy. Some competitors, unlike Proper, offer policies that stack on top of your existing insurance. Proper’s policies replace your current insurance, so you’ll probably have to do some comparisons to see which type of coverage makes the most sense financially.

Proper takes all liability and commercial (or business) claims out of the same “pool” of money. While most of us hope to never reach the limits of our insurance policy, it can definitely happen.

If you find yourself in a situation where you’re being sued and also need a payout from your commercial coverage, it is very possible that you will exhaust these funds. They do offer an additional $2 million in commercial liability coverage, but this will increase your premium significantly.

If you live at your rental property, you’ll need continuous vacation rental insurance coverage. However, depending in the number of guests you have and the percentage of time that you’re actually renting, it may not make sense for you to pay for full-time personal and commercial insurance.

For example, if someone only occasionally rents out a room in their home (let’s say three days a month), they’re only a “business” for 10% of the month. However, with Proper, you would be paying business insurance 100% of the time. In this situation, on-demand coverage would make much more financial sense.

With on-demand coverage, you only pay for the days you need. In the above scenario, the host would pay their normal homeowner’s insurance plus three days’ worth of on-demand coverage from a company like Slice. They would not be canceling out their small amount of income by paying for an expensive policy that they probably won’t ever need to use.

In Conclusion…

I highly recommend considering Proper Insurance for your short-term rental insurance needs. They are a well-reviewed company with the backing of Lloyd’s of London, which has an impeccable resumé.

It was founded with the niche interests of short-term rental owners in mind, unlike most other major insurance providers which cater to a much broader clientele and are less specialized. They also offer several unique policy features such as off-premise coverage, liquor coverage, and limitless lost income claims.

However, if you are a more casual host and don’t rent out your home very frequently, it may not make financial sense to invest in one of the full-coverage policies that Proper offers.

If you’re unsure whether they have a policy that works for your needs and fits your budget, you can get a fast and easy quote in under 5 minutes on their website.

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