For many Airbnb hosts, it can be a balancing act between operating a business and maintaining a home for yourself. An unfortunate reality that some hosts fail to realize is that their standard homeowners insurance policy does not cover an Airbnb rental. In fact, if your personal insurance discovers that your home is now classified as a business, they can deny your claims or even cancel your coverage.
Thankfully, as a Superhost, I have years of experience in the world of short-term rental insurance. It can be overwhelming to search for coverage on your own, so today I will be comparing two companies: Proper Insurance and Slice. Each company brings a unique set of options to the table at prices that won’t break the bank.
Click HERE to get a quick 5-minute quote from Proper Insurance>>.
So how do Proper Insurance and Slice compare?
Proper Insurance is a standalone policy that is both personal homeowners insurance and commercial short-term rental insurance. Slice is an on-demand, pay-as-you-rent supplemental policy that is used in addition to your current homeowners policy. Each has a base coverage that can be supplemented with add-ons as desired, but Proper’s standard policy is more comprehensive.
|Totally replaces standard homeowners insurance||On-demand coverage|
|Host can live at the property||Independent of homeowners insurance|
|Underwritten by Lloyd’s of London Insurance||Backed by Great Lakes Insurance SE|
|Business liability includes legal defense costs||Legal expenses are additional coverage, liability is included|
|Adjustable coverage amounts||Many add-ons for with no deductible|
Proper Insurance Review
The short-term rental market is a relatively new one, so it is important that companies that cater to it are up-to-date and relevant. Proper Insurance is a great choice for a short-term rental insurance provider. It was founded by a group of people with extensive rental insurance experience who wanted to support the ever-growing number of people choosing to optimize their properties by renting them out.
Proper is underwritten by Lloyd’s of London, which has been in the insurance business for over 325 years. Customers can rest assured that they are in the best of hands with such an experienced company’s backing. Lloyd’s of London provides insurance for the majority of both FTSE and Dow Jones companies, making them an attractive and reputable choice.
HomeAway and VRBO exclusively endorse Proper Insurance. While Airbnb does provide their own form of liability insurance to cover the host in some cases, it is an absolute necessity to purchase your own third-party coverage. Proper makes it very easy to see whether they’re a good fit for your particular needs. You can get a 5-minute quote here.
The short-term rental insurance that Proper offers is technically classified as commercial insurance. This is due to the fact that an Airbnb rental is, in most cases, officially a business and must be insured as such. It still also functions as a total replacement for your current homeowners insurance policy. If you reside at your Airbnb, Proper adds on personal liability coverage similar to what you would find in a standard, non-commercial policy.
Whether you’re managing multiple properties or just renting out your guest bedroom to the occasional tourist, Proper will still insure you. Some competing companies may not allow certain business classifications to purchase their short-term rental policies. In this case, it does not matter if you are a sole proprietor or if you are a corporation, the policy can be adjusted to fit your needs.
Proper’s income insurance means that any revenue you lose due to damage or necessary repairs will be reimbursed. This is obviously a great feature, and it is especially important to those who make the majority of their income during a single season.
For example, if you operate a ski rental and a natural disaster forces you to close, your entire season’s income could be gone without this protection. Unlike Slice, this feature is included and does not come at an extra cost.
A notable feature is that Proper allows customers to select the amount of income they would like to insure, making them an appealing, budget-friendlier option for a host that doesn’t want to see their earnings go straight back into their insurance premium.
If your rental doubles as your home, as is the case with many Airbnb hosts, you can still be insured. Proper will modify your coverage to include personal liability insurance as you would have with a normal homeowners policy.
Factors that attract guests to vacation homes can often be the things that pose the greatest risk of incidents. Features such as swimming pools, watercrafts, and bicycles can be great fun for your guests, but it is critically important that your insurance also covers them. Proper allows coverage of “off-premise” items such as these to ensure that hosts are not responsible in the event of an accident or injury.
Airbnb’s Host Protection insurance offers basic coverage for all hosts in the event of a dispute. That being said, it is a good idea to make sure that you have your own liability protection (in your own name). Proper’s commercial liability coverage includes legal defense. Consider, though, that if the commercial liability coverage is used up on something else, the legal defense budget may not have much left in it.
Proper Insurance Pros and Cons:
- Customize amount of income insurance
- Host can live at property
- Business income claims have no set time limit
- Continuous coverage, no need to change or activate plan with each rental
- Liability coverage is part of commercial coverage, not its own category
- Pricing increases if host lives at the rental property
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Slice Insurance Review
Slice Insurance is a very trendy and modern option for short-term rentals. They feature a sharp, clean website and an app to make management and payments a breeze. Unlike Proper Insurance, Slice is a supplement to existing homeowners insurance. It does not replace your current policy.
This does mean that a host would be dealing with and managing two separate insurance policies, but the added bonus is that losses are not reported to your personal homeowners insurance.
Slice is unique in that it offers completely on-demand insurance coverage. Coverage is billed by the night, so hosts only pay for the exact amount of coverage they need. This makes Slice an extremely appealing option to several types of hosts.
For example, a host that rents their Airbnb for a relatively low cost may end up seeing most of their earnings go directly back into their costly insurance premiums, making their business inviable. With on-demand coverage starting at $7 per night (according to Slice’s website), this host could save a significant amount of money.
Another type of host that could benefit from night-to-night coverage is someone who gets somewhat sporadic rentals. This host could be paying a hefty monthly insurance premium, but might only require 3 or 4 actual nights of coverage. With on-demand insurance, their profits could certainly be maximized.
Slice offers a relatively simple base policy that covers the full replacement cost of the home, its contents, and any other buildings on the property. Liability insurance is also included, and customizations for pests, liquor, and mold and more can be included. Slice even has options that ensure you if your guests damage your neighbor’s property. They have a standard deductible of $1000, and almost all of their add-on coverage options are available deductible-free.
Unfortunately, you will need to pay an extra premium to receive any coverage besides the aforementioned buildings and their contents. This does allow customers a lot of flexibility and helps them to avoid paying for services they do not want or need. On the other hand, any omission on the host’s part could result in them being responsible for the full damages in a category they did not choose to include.
Slice allows its clients to be very hands-on with their insurance. Some hosts may find this appealing, and the control that it offers can add a factor of security. Others may find it tedious, however, to be constantly requesting coverage each time they get a new booking.
Slice Insurance Pros and Cons:
- Can add on many coverage options with no deductible
- Web app for easy claims
- Liability coverage included
- Very affordable
- Not available in Kentucky or New York
- Coverages beyond basic replacements are add-ons, extra costs
- Extra work to request coverage for each individual stay
Both Proper Insurance and Slice cater to the niche short-term rental insurance market. Each is well-suited for a particular set of needs, and each offers some great benefits. Slice is a fantastic option for those with more sporadic renters who don’t want to nullify their earnings with an expensive policy. However, the host is responsible for continually restarting coverage with each rental contract.
Proper is a great option for a wider spectrum of hosts, from the casual to the professional. They also offer the added benefit of continuous coverage, as well as an all-in-one homeowners and commercial insurance policy.
This can make it the more affordable option in the long run, as most hosts would have to purchase a new policy and either supplement or cancel their existing homeowners insurance regardless. Get a quick quote from Proper Insurance here.