Last Updated on June 16, 2023 by Rental Recon
With seemingly dozens of new vacation rental insurance companies popping up left and right these days, it can be extremely hard to make a choice you feel confident in.
Lloyd’s of London is not new at all, and has been helping out those in need of insurance protection for over 300 years! With this resume, it’s no wonder we see it recommended time and time again as a provider for vacation rental insurance.
What is Lloyd’s of London’s vacation rental insurance?
Lloyd’s of London vacation rental insurance is offered through Proper Insurance. It replaces a standard homeowners policy and offers flexible coverage options for your home and belongings. Lloyd’s of London has an extensive history serving the insurance needs of the world for over three centuries.
What is Lloyd’s of London?
Lloyd’s of London is one of the oldest insurance providers around, tracing its origins back to 1688! While they originally offered marine insurance, they now provide all kinds of protection as well as other financial services.
In the 1700s, underwriting as we know it began to appear. Lloyd’s was at the forefront of this as well, and began insuring ships against damages, lost or stolen cargo, and more. They have had an illustrious history in London and have always been innovators in the insurance game.
One of their most popular new(er) offerings is their vacation rental insurance. While it is technically operated by another company, being underwritten by Lloyd’s of London should give potential customers a lot of faith in their investment and confidence that they are making the right choice, just as others have been for over 300 years!
What is their vacation rental insurance?
Lloyd’s of London underwrites vacation rental insurance offered by Proper Insurance. While Proper Insurance is a separate company from Lloyd’s and thus operates independently, the financial backing of one of the oldest players in the insurance game would make anyone feel more secure in their choice.
Proper Insurance’s vacation rental home policy completely replaces your standard homeowners insurance, meaning you’ll only need to pay for one policy instead of two. This not only makes financial sense, but also takes a lot of hassle out of the home insurance equation.
Proper Insurance is based out of Virginia and was founded by former employees of another insurance agency called CBIZ. They are a company that specializes in short term rental insurance; in fact, it’s all they offer!
This is one reason why I love Proper: while lots of other insurance companies run their short term rental insurance policies like a side gig, Proper fully dedicates their staff and expertise to helping Airbnb and vacation rental owners like us.
Rental Recon Tip: One common question that I see from Airbnb newcomers is exactly how insurance for Airbnb works (or if you even need it). The short answer is YES, you do need it (more on this below) and the way it works isn’t so complicated at all.
Through Proper Insurance, you can have both a personal (regular homeowners) policy and a commercial (Airbnb or vacation rental) policy all in one. No messing around with two companies, seeing whose policy covers what, no nonsense at all.
Do I need vacation rental insurance?
You absolutely need vacation rental insurance, no matter what. Even if you live in the home? Yes. Even if you’ve never been to the home? Yes. Even if you only rent out the home one night a year? Technically, YES!
The reason for this is that your standard policy (also known as a personal policy) considers your home a residence and nothing more. They know you’re just living in your home and maybe having some friends or family over, not much else. If you start inviting strangers into your home and collecting money from them, things start to change in the eyes of your insurance provider.
When you rent your home, you are conducting a business operation. This means you’re no longer using it as a strictly personal residence, but as a place of business as well. As such, you need commercial liability insurance. You can combine both your personal policy and commercial policy in one with Proper Insurance, meaning you’ll have all the coverage you need if you also live at the residence.
If your homeowners insurance provider finds out that you are renting out your home, they are entitled to cancel your policy immediately. Of course this would be disastrous, but it would be even more disastrous if a guest were seeking damages against you and you now had nowhere to turn for help.
Don’t get caught in this situation! Make sure to explore your options with Proper Insurance and check out my comprehensive review of Airbnb insurance providers HERE!
Lloyd’s of London Vacation Rental Insurance Pros
As I mentioned before, one thing I love about Proper Insurance is that it was founded specifically for Airbnb and vacation rental owners. Sometimes going through a larger company that caters to a broader audience can make you feel a little less like an important client of theirs. After all, most companies didn’t even offer short term rental insurance until a few years ago, and many of their offerings are still very limited.
With Proper, I’ve always felt like a valued customer and I respect how much they know about their specific niche in the insurance market. Insuring vacation rentals isn’t exactly like insuring a regular house, and their employees have the expertise to help you navigate the ins and outs of the regulations.
Another big plus for me is how their policy replaces your existing homeowners insurance policy. The only thing worse than dealing with an insurance agency is dealing with two insurance agencies, so the bundle is much appreciated. Your coverage is all under one roof, so to speak, which makes filing claims and navigating benefits that much simpler.
Something else that gives Proper a bit of a boost in my book is that they are exclusively endorsed by HomeAway and VRBO. Given how well they cater to the industry, this makes a lot of sense. A company with the backing of Lloyd’s of London and the expertise of specialized insurance agents is good by me!
Lloyd’s of London Vacation Rental Insurance Cons
Unfortunately, as with everything, Proper Insurance has its drawbacks as well. If you live at the property that you rent, as most smaller Airbnb hosts do, your policy’s price will increase. This makes sense, as it is serving double duty as both a personal and commercial liability policy, but is still something to be aware of.
Additionally, their policies bundle personal and commercial liability insurance together and don’t separate out the coverage options. This is a minor issue for most people, but if you have a lot of claims in one department and then again in the other, the budgeted amount of coverage can be eaten up quicker than if they were separate.
Want to know more? Check out my complete list of Proper Insurance pros and cons HERE!
Lloyd’s of London Vacation Rental Alternatives
There are almost too many vacation rental insurance options out there to count! While Proper offers the most comprehensive coverage, in my opinion, their policy may not be right for everyone.
Some companies offer “on demand” insurance, which is great for those who don’t rent out frequently enough to justify an expensive policy. For these on demand options, you can literally switch your coverage on and off when you have guests. Keep your regular insurance for when it’s just you at the home, and flip on your commercial policy when you have guests!
One such company is called Slice Insurance, and their on demand coverage is a big draw for a lot of clients. Read my review comparing them to Proper Insurance today!