I\’m planning to turn one of my properties into an AirBnB, and so I made a few phone calls to insurance companies. I live in an area with a very high demand for rentals and housing – in 2021 the property prices increased 25-33% and there is tourism year-round.
I started my investigation with a phone call to Belairdirect because they are my home insurance provider for my primary residence.
Belairdirect (4.2 stars on Google Maps) quoted me about $1100/year which sounded great, but their policy stipulates that you rent out your property for only 180 days out of the year. I thought this was unusual. 180 days is about 6 months which, at $300/night would gross me about $54,000/year, but my target is to rent the property every single weekend of the year (104 nights) and have it 50% booked for weeknights (130 nights) which equates to about 234 nights per year. STR University recommends using dynamic pricing, and be welcome vacancy in order to maximize profitability.
I called Intact Insurance (4.1 stars on Google Maps) and they told me that they would be my happy to do a quote but I would have to also hold a policy with them for my primary residence. I have had 2 claims with my existing insurance provider and they have been great to work with, so I saw this as a dealbreaker. I didn\’t bother getting a quote from Intact because I didn\’t think they could beat my current insurance rates.
Next I looked at The Personal Group Insurance Company (3.2 stars on Google Maps) because I kept getting their junk mail because I am a member of a certain group. I checked their reviews on Google maps and it appeared that they had an issue with customer satisfaction, so I didn\’t call them. The last thing I want when putting in an insurance claim is a company that is difficult to deal with. I\’m looking for value which means decent quality for a decent price.
Next I called Square One Insurance (4.7 stars on Google Maps) because their reviews were quite good. They asked a lot of questions, and quoted me $2200/yr to $2900/yr depending on whether I would be using the property for personal use also, and that was with no limit on the number of rental days. Square One Insurance sent me not just one quote, but 3 quotes with different options so that I could compare them.
Next I might call a mutual insurance provider. These insurance companies return a portion of their profits back to the policy holders because the policy holders are share holders. This makes sense to me because they are less likely to keep the rich getting richer. Why didn\’t I just call a mutual insurance company in the first place? Because I need something to compare to.
The decision is yet to be made but I hope this article saves you time!
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