Insurance shakedown sort of?

[alldodge]

Asked my insurance agent that I need the policy on the vacation rental changed from me to our LLC. We went from a regular monthly rent to daily and changed the deed to the LLC. He says this is no issue and will get back with

The policy goes from a flat yearly fee to a percentage of the money the rental makes. This also comes with yearly audits of gross receipts, and if the estimate was low, I owe more and if less they give me a refund. I felt like the MOB just arrived.

Says being commercial policy it depends on how many people go thru the place, and shows me 2 different print outs, one more then the other based on gross receipts. I take a quick look and say, one is more then the other based solely on the funds not people. If I have 50 stays at 100 a night = 5000, or 50 stays at 300 a night = 15000, and only thing the changed is the price of the lodging, not the amount of people.

Like the MOB comes into a store and ask for a percentage or else, without the or else part.

Hey BruceB you hear of anything like this on your side of the country?

 

[aspeck]

I would be comparing insurance companies

 

[alldodge]

That's the plan was hoping someone had gone thru the same, but understand why no one has. I do plan to look around thanks

 

[cptbill]

Have had plenty of rental property in my day and never heard of that, is it a new thing or just the ins co. trying a different way to make money? I'd shop around

 

[alldodge]

I did talk to the owner of the local NAPA and they have same kind of policy. Do understand with something like a retail store but not a short term rental (hotel)

Just found Proper Insurance (Cover holder LLoyd's) online out of Montana and submitted for a quote, waiting to hear back. They list vrbo and airbnb and is how I found them. There is also CBIZ but have not yet asked for a quote yet

 

[GA_Boater]

In the case of NAPA I can see that because the insurance may have a lost income clause. If disaster strikes the clause would make up for some income lost during rebuilding.

Daily rental vs. monthly means more renters and an increased chance of damage and claims. :noidea:

 

[alldodge]

Agree, the NAPA owner says his doesn't have any loss business insurance, just liability. If I'm paying 2K for 15K coming in wonder what he's paying with employee's and probably 3M coming in.

Just called USAA and they are working on a quote, said it will take a couple days

 

[aspeck]

We had a car dealership and did NOT have a price based on our revenue. We have a car wash and it is a fixed rate. I have monthly rentals and it is a fixed rate. They are all sole proprietorships, so maybe that is a difference, but all are fixed rates. Our church insurance is a fixed rate ... except for the camp addendum and that is based on camper days, not $'s. Every year I have to report the "camper Days" number.

 

[alldodge]

Got call back from Proper Insurance and they are (cost/deductible) 2100/10,000 or 2300/5,000 or 2500/2500 a year. Based on 1M/2M and even covers when the guest are away from the rental, that's different but I like it. Even have alcohol as part, meaning if previous guest left some in a cabinet that was not found and the next guest found it. This means I supplied it, and therefore I would still be covered.

They have the rebuild value at 190K which is close to 90 sq ft, which I thought was a bit high, but it's their quote. The increase also increases the cost of the policy.

 

[redneck joe]

for our house when we signed up for airbnb, USAA would only cover 2 guest nights per month. As much as I hated to we moved to Liberty.

I don't handle the insurance on our rental but my brother has not spoken of any issues.

 

[alldodge]

USAA was $500 cheaper then Proper but did ok for coverage but not good, and they used $101 a square foot.

Wound up going back to KFB and its $900 less then Proper. Coverage is better then USAA but not as good as Proper. If the house wasn't under an LLC I would go with Proper hands down. Do see anything happening, but if it does and has the worst outcome, then we are still protected.

Will look at it again next year

 

[Old Ironmaker]

Just as Yogi Berra once said, "When ya have it ya don't need it and when ya don't ya need it."