Waivo’s sister company, Proper Insurance, recently introduced ‘Squatters Coverage’ to their short-term rental insurance program. With over 50,000 policies written in all 50 states, Proper is the nation’s leading insurer of short-term rental properties. Their policy replaces the property owners current home insurance, it’s commercial homeowners’ insurance.
Adapting to the mid-term rental market
As a result of Covid-19, millions of people no longer were required to work from an office and suddenly had the flexibility to work anywhere they wanted. Most chose to work from home, but many got creative and realized they could book a short-term rental for 60-90 days, stay within a few hours of home, and literally have a work-cation, or stay-cation, whatever you want to call it.
This mid-term rental model saved many professional property managers during the height of Covid as they suddenly received booking requests for 60-90-day stays. One potential downside to this is squatting and tenant rights.
Shortly after the lockdowns of 2020, many of Proper’s clients began calling in asking two specific questions, first, does Proper’s insurance policy cover mid-term rentals stays, and second, is there any coverage for a potential squatter?
Yes, the policy covers mid-term rentals. Since Proper does not carry any occupancy restrictions, fully policy coverage is in place, whether the property is rented short-term, mid-term, long-term, personally, unoccupied, or vacant. Coverage is always in place. This is somewhat unique to Proper and one of the reasons the insurance program is so popular.
According to Airbnb, many states define residential tenancy may be created after 30 consecutive days of occupancy. Where someone who stays fewer than 30 days generally does not have tenant rights, unless there is a written agreement stating otherwise.
This means after 30 days a guest would technically have tenant rights, and the owner would become a landlord. Every state has different laws, but this naturally brings up concerns with regards to a tenant not paying rent, or worse, squatting and refusing to leave.
Squatters Coverage: $10,000 in lost income & $5,000 in legal expense coverage
In an effort to provide squatters coverage, Proper created a first-of-its-kind endorsement, which can be added to clients existing coverage for a small premium or purchased up front for new clients.
Research shows that the normal legal process to remove a squatter can take anywhere from 30-90 days. During this time, the property owner is typically not being paid rent, and the paperwork and legal process can be very time consuming.
The first part of Proper’s coverage provides up to $10,000 in lost rental income as the result of the squatter. This gives the property owner time to get the squatter removed.
The second part of the coverage provides up to $5,000 in legal fees associated with the removal of the squatter. The laws and legal procedures around tenant rights and squatting are very complicated, yet attorneys are very expensive. This $5,000 allows property owner’s to quickly seek legal advice or hire an attorney as the goal is to get the squatter removed as quickly as possible.
For more information on Proper’s short-term rental insurance program, call 888-631-6680 or visit their homepage.