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Episode 069 - STRR - What Types of Insurance Do I Need for My STR?

insurance Sep 17, 2021


Insurance can be confusing but you should know that your regular Home Owners Policy most likely is useless when it comes to protecting your STR Business.  Even a Landlord Policy is wrong and won’t give you the liability coverage you need.  We cover the many types of insurances you may want and what they cover.  We’ll tell you why those other policies fall short and where you can pick up a policy that will let you sleep like a baby at night.



Transcript of this Episode:

Hi, it's Michelle, the master money mindset and you are listening to BNB dash boss pod.

And in today's podcast, we are going to be doing our Friday rewind. Yes. I'm out of town right now. And I bet you can't even tell because it sounds like I'm right here. Doesn't it. But actually I'm not on that. Even here. I'm out of town. I'm probably in Disney world right at this moment. What day is this going to be airing?

Um, blah, blah, blah. All this I'm. Oh, heck yeah. The 17th. Usually around September 16th, which is my birthday right around the September 16th. I will always be in Disney. That is Disney universal. Those are the that's usually the first weekend. It used to be the first weekend of the Halloween horror nights.

Now they've been starting it a little early, which is way too early for. They started around my birthday. And, um, now that they're doing it a couple of weeks early, we have to get there earlier for the rush of fear. That's right. If you do the first three weekends at the Halloween horror nights at universal studios in Orlando, you do something called the rush of fear.

You get to go every single night for the first three weekends, and we always get the front of a line pass and such a blast. I mean, it's such a blast and it usually starts every. This year. I'm quite disappointed. I have to tell you. We always go for the food and wine festival. And along with the food and wine festival, if you're a Disney fan, you would know that there's also something called eat with the beat.

And every single year they have like all these different bands. Different era's and everything, but we always go see sugar Ray. It is like, it is like, my husband's favorite thing to do is go sit and sugar. Ray has high five Tim, more than once. And he's like, I'm never going to wash my, my hand. What's that guy's name?

Oh, gosh. I'm so sorry. I always forget the lead singer's name, but the guy from sugar Ray, uh, obviously everybody knows who. And, um, my husband just loves him. We ended up singing, you know, sugar Ray songs all weekend long, or for, probably for the first three weekends. Right. We'll just be singing. He's there for three nights and we'll try to catch that concert.

He, they do at least two a day usually, and for three days in a row and then they'll have somebody else. So they've had, I mean, incredible bands. I'm not even joking foreigner, you name it, name some big bands from the eighties and nineties and some, even from the sixties and seventies. Cause they had David Jones from the monkeys there and they had Mickey from the monkeys there.

One time to. You know, obviously before they passed away. Um, even though it's Halloween, they don't usually do spirits, but they've had some great crepe pans and you get to listen to them. They usually, they sing over in the America Plaza. And you can grab some food and sit down and eat and listen to your favorite music and sing along.

And it's always fun when my daughter's back home, my oldest daughter I'll take a video of something and I'll send it to her on my phone. And she'll guess who it is. One day I sent her Bob, the kids from uhmmm, Bob, what is that? The Nelson's or something? I can not remember their name, but anyway, I sent that to Nicole and she was like so excited.

Oh my gosh. I saw them when they were little kids and I go, well, they're not so little anymore. Sorry about that, but I swear someday, we're going to see the spice girls in, in sync up there because we had to drag her to all those concerts way back then. But it's a lot of fun to eat and listen to music.

And this year, guess what? Obviously they have the food and wine festivals, so going on, but no eat to the beat. And I can't even tell you. How disappointing that is, I mean, last year, because of COVID we didn't get the Halloween horror nights. It was only two houses, I think. And only during the day. And it was just come on really.

Um, but this year it's back, we've got a lot of houses to go see, so I'll tell you how that is when I get back. But, um, just the fact that we got. Each of the beat is really bummed us out because that's pretty much the part that we love the most. I mean, it was just a lot of fun to go and see your favorite songs being sung, you know, it's, it was so great.

It's honestly so cool, but okay. We'll make sure that we do something else while we're there. This time. I wanted to let you know that today's episode, we are going to be talking about insurance. So I'm going to be doing a replay of one of our earlier podcasts. And it's what types of insurance do we need for our short-term rental?

And I want you to know this still applies to you. There are so many people. Who decide for themselves? Oh my gosh, we're not going to get any extra insurance. I mean, we've got a million dollar coverage from Airbnb or whatever, and I'm telling you right now that insurance is liability insurance and it is completely at the discretion of Airbnb themselves.

So if you had, for instance, a guest who fell asleep, breaking the rules and smoking in your property and your house lit on fire and burnt down to the ground. They would or would not cover it. You have no idea if they would. And there are actually lawsuits. You can look up there's Airbnb nightmares, right?

If you want to look up some scary stuff, but I don't suggest you go on there and looking for anything because it can be scary. But if you go on there, you'll see that there are people who have been in lawsuits with Airbnb for a long time. They are not an insurance company. You need to get proper insurance.

And when I say proper insurance, I mean that in every way, because proper insurance is what you need. And proper insurance is who we have. There's actually a company called proper. But when you go to proper dot ensure, you will get them and they cover short-term rentals. If you go to our website, BNB bosses, or, you can go halfway down and click on all our services.

And you'll see a ton of insurances specifically for short-term rentals. That's what you need. There's only one major company that does short-term rentals right now that we know of, but everybody else will say, oh yeah, you're covered. You're covered, but you're not. Because there's something weird about a short-term rental.

It's not really inviting a guest guest into your house, it's actually doing a business. And so it has to be a specific type of insurance. And we're going to talk about that today. So I'm going to be listening in, hopefully everything that we said back then still applies and I believe. But I want you guys to remember, this is super important.

You need short-term rental insurance. I don't care what anybody tells you. You need it. And if you're doing rental arbitrage, you need it. And it's one of those really great things that you can offer to pay for the insurance, for your landlord and your landlord's going to love you. So it's basically a big bonus, but you need it.

So it's, it's something you have to. So listen away and I'll pop in maybe in the middle. If there's something I want to add, and if not, maybe I'll pop in at the end, but if not, then I did a darn good job. We'll find out, okay, have a listen insurance. And this is a very, very important podcast. You need to listen to this because I'm going to tell you something that might.

Scare you I'm like this might scare you. You might think you're covered your insurance agent might be telling you that you're covered that you can have a short-term rental within your property, and you can have people in as guests and you can be making money off of it. And don't worry about it. But if you check your policy, the majority of homeowners policies do not cover short term rentals.

And if you are renting a property. It's even worse because a landlord's house may not be covered at all. If your guest does something to their home, this is a very important episode. Insurance is one of those crazy things. You need it, you gotta have it. And you think you're covered just because you're using Airbnb or VRB.

Let me tell you, you're not, you're not covered at all. Everything is not covered in their policies. I'm gonna really quick read what the host insurance coverage says from Airbnb. It says the host protection insurance program provides primary liability coverage for up to a million dollars per. In the event of a third party claim of bodily injury or property damage related to the Airbnb stay.

This coverage is subject to a million dollar cap per listing location, and certain conditions, limitations and exclusions may apply. And you can review those all on the Airbnb website. Here are some examples of what the protection, it doesn't say we'll cover. It's like this should cover. The, I mean, just right there, that verbiage right there is kind of freaky to me, but it says it should cover a guest breaks the wrist after slipping on a rug and brings a claim of injury against the host or a guest is working out on the treadmill in the gym of the apartment building and the treadmill breaks.

The guest is injured and they fall and they bring a claim against injury against the host and the landlord, a guest accidentally drops. Suitcase on a third party's foot in the building's lobby. And the third-party brings a claim of injury against the host and the landlord of the host building. So those are things that they say should be covered, but then here are examples of what host protection insurance doesn't cover.

For sure. It doesn't cover any kind of intentional acts where there's liability or a liability resulting to it from an actual. There's no accusations of slander or defamation of character. It doesn't cover that. It doesn't cover any damages from property issues, like mold beg, bugs, asbestos pollution, and it doesn't cover any auto accidents and he vehicle collisions.

Okay. So then it does have like, uh, a bunch of links there that you can cover. But like I said, did you catch that? When I read it, instead of saying we'll cover things like the. It didn't say it. Well, it said it should. And the reason why it said it should is because Airbnb reserves the right to accept or decline.

It's all at their discretion. And you agree to that. So if you are just leaning on Airbnb or VRB owes anybody's insurance by themselves, you are really. Seriously, you're just, you're standing on the edge of a cliff and you just have no idea how far down you can fall right now. It's like your blindfold.

It's like the Netflix thing that's going on right now. Right? It's like everybody's blindfolded doing stupid stuff because of that, you know, bird box movie. You're like, no, don't be stupid. Don't don't be doing anything crazy. And don't be blindfolded. You need to know what's going on. So, what I'm going to do is I'm going to read you some examples of some things that can happen.

God forbid, any of this stuff happens. You and I both know that insurance is there just in case, but I want you to know, I lost a home to a fire in 2005, my main residence and never in my life. Did I ever believe that I would lose my home to a fire? You never know, like you, you can't, you can't make guesses about, you know, whether or not things are gonna happen.

Luckily I was covered. I mean, honestly, and I never thought I would ever use that car. My car insurance, I got five kids. Of course. I know I'm going to need car. But my homeowners policy and stuff, I never thought I would ever have to use it like that. You know, I thought maybe a flood or whatever, never thought I would lose every single thing in my home.

So I just want you to know that it's better safe than sorry. It's better to have coverage. It's better to have good coverage than bad coverage. You need to always, always, always read your policies. Cover. And especially when it comes to, uh, an Airbnb or any type of short-term rental property, because agents sometimes think they're giving you proper coverage.

And when you read the policy, there is nothing in there about it. And there are horror stories all over the internet about this, this very thing where somebody's insurance company said, yes, we will cover you here. We extended this policy. But then when they read it, it said nothing about having a short-term rental and it literally would not cover them.

So I'm going to give you some worst case scenarios, some worst case situations. Okay. But I want you to remember that your regular homeowner's policy will not cover you because you are now a business operator. So you think that just having or even a landlord policy, you think that having a landlord policy or a homeowners policy is going to cover you?

It will not. And I want you to read it. Okay. So now I'm going to read these, all these scenarios for you. And I want you to think carefully about how these will be covered under your current policies and under, you know, the Airbnb one that should cover. Okay. A guest starts a fire in your kitchen and your whole place burns down, or even part of it burns down.

Right? A guest child drowns in your pool. A guest is injured at your building's gym, your garage door shuts and damages, a guests car, a guest trips on an uneven tile in your apartment and balls and breaks. I guess becomes ill from your coffee maker, not being properly cleaned a guest, steals your TV, your furniture, or your appliances, a guest, trashes your house, and puts graffiti all over the walls.

And the furniture, a guest damages your home in some other way, shape or form a guest does damage to a neighbor through a community wall that you share. And I want you to think about that one for a moment too, because. Remember when it comes to liability claims and things like that, there's a lot of stuff you can do to prevent these kind of situations just by putting a crap load of stuff in your house, rural blocks.

It's like, please be kind to my neighbors. You know, please be quiet after this such and such time. Please don't allow your children to climb on the walls between my house and the neighbor's house. I mean, literally just having. Please be a kind, you know, respectful neighbor and, you know, don't bother them or don't park in their space.

Things like that can prevent a lot of trouble later on. If you just have things written down, it'll show that you had all the intention of being a good name. So you can prevent a lot of these things. Not, not that you can prevent the lawsuit. If somebody wants to be a jerk, you can't prevent people from being jerks, but you can show that you had the intent of, you know, protecting your neighbors.

I guess, damages force you to cancel your future reservations and make repairs. So you lose income. Now that's a big one, too. Uh, guest causes your HOA to find you, they do something that is against your homeowner's association and they, the HOA sends you a letter on you're going to be fined a storm damages, your property, a flood ruins your business, your office, your short-term rental, your computer, anything like that.

Flood insurance is absolutely necessary, especially in most areas. The car you use for your BNB gets into a wreck. Now, if you're hosting events like weddings and parties, or if you're doing any kind of catering or any type of, you know, you've got a, maybe a gift shop or something you'll need additional insurance in addition to all these things.

So I am not going to cover that here. I don't do events, but there are specific insurances for events. People who are doing any kind of catering. Those types of insurances are all separate too. And you're going to need additional ones. If you have any kind of store or anything on your location, that's a completely different bird.

You know, they, they want you to have each and every type of business that you. I became really aware of the differences in insurance. When I started flipping houses in Florida and doing a bunch of short-term rentals now and investing in Florida real estate. Now I lived in Arizona, but I've never, I've never really, really dug the, the heat here in the summertime.

It's really, really hot in Arizona summer, but my husband adores Arizona. He never wants to do. And I adore my husband and I never want to leave him. So I'll take off and go to Florida. And when my parents were alive, my dad and I did a lot of flipping and real estate in Florida. And when we first got there, you could just use state farm.

And that's who I used for my rental properties in Arizona was state farm. I had a state farm policy for my. And for my car and I had, you know, the little bundle and when I got a rental property, first thing I did was call my state farm agent and said, look, I picked up a rental property and boom, she was on it.

And I literally didn't have to do anything. I know her, I still to this day know her phone number, but I would just call her up and I'd say, Joanne, I need this. And she would do it. Her girls would do it. They would write up a policy, send it over. I'd send a check in. It was actually very inexpensive too, for a full year of renter's insurance.

As a landlord here in the state of Arizona. When I got to Florida, when it first got there, state farm was available there. Now that I couldn't use my Arizona agent in Florida had to have a different agent, but what was really crazy. After, I think it was David. I'm trying to remember which hurricane, but there was a hurricane and state farm just said, we're out.

We can't do this anymore. And a lot of big, big companies have pulled out of certain states when, you know, when they lose a lot of money, they say, that's it. We're not going to do any more homes in that state. And what happens usually right afterwards is chaotic. Just imagine all the big companies, you know, pulling out.

So what happened. All these little fly by night companies pop up. And we got a real estate broker who had searched for different insurance policies for us and their regulation. And, and Florida was really different too. We started to realize that what our agent knew to cover was way different. Here in Arizona.

It doesn't matter if you, if you have a rental property, it's a rental property and these laws can change and stuff, but in Florida it made a difference whether you bought the home and it was just an empty home and you were waiting to put somebody in it, if you bought it and you were going to fix it up and you had people in there like contractors and everybody fixing it up, that was a different type of.

There was a different type of policy. If it was a long-term renter and you had a long-term renter in there, there was an, a different type of policy if you had any personal items in there. So let's say you had a partially furnished apartment that you are renting out. That was an entirely different. It literally, I mean, every, if there was a huge questionnaire, basically every time you were trying to figure out insurance.

Your Florida properties, you had to go, okay, well, right now we bought it to fix and flip it. And so right now we're fixing that, but once it was done, you had to change the insurance immediately. And not only that, the insurance was super expensive. I'm talking for like a few months or sometimes a month would be as much as an entire year in the state of Arizona.

It was crazy. They were reaming people. We would just pass those expenses off. I mean, you can write them off, but th th that's the cost of doing business, but at the same time, insurance is like that. You have to know, and you have to read, don't just trust an agent that tells you this is covered. You have to know what you want covered.

So what does all this mean? It means you need insurance and you need more than one kind of insurance. Okay. To cover your. You need to have a few policies. Most likely you can get away with having Airbnbs, but that is not the only insurance you want to use. You want to have another policy and just like a car you're going to.

You know, different types, you're going to need like a comprehensive and a liability. So something that's going to cover the property in its contents, and then something that's going to cover. You know, if people Sue you for some kind of injury or something, so you're going to need that, but you need liability insurance specifically that covers guests short term rentals.

Yes. Okay. So make sure it's not just a guest that you invited at home in your home, because a guest that you invite into your home, like your friend down the street or something that is a different, that's a different animal. Like I said, it's just a different bird. It's a different animal because when you have a business, it's not really a guest, it's a paid person.

They paid you to come into your home and therefore it's a business in the eyes of the Lord. It's a business. And if you have coverage that says a guest, what that means in the eyes of the law is someone that you invited your home to come and visit you. They were not paying. So a short-term rental guest is completely different.

It's a person who paid you as a business. Okay. So you have to think of it. Like the law would think. So make sure that it specifically covers short-term rental guests. That's what, that's the verbiage you want to find. Okay. You want to make sure that they know that you got money to allow these people into your property or the property that you're in control of.

Okay. So it needs to be specific and it needs to cover their guests, which is. A little bit more. And that means that if they invited people into your house with your knowledge and consent or without it. So let's say that, um, you've got a guest who's coming in and they say, there's just two of us. Don't worry.

And then next thing you know of like there's a party and there's 20 people and they cause a bunch of damage. You only knew about two of those people and the people who may be on camera for doing the most damage where people that your guest invited in. So you have to make sure that it, it covers them too.

Okay. So make sure it does. And remember it's those liability coverages are for people get injured most of the time it's for a physical injury, even if there's a terrible mishap, somebody's, you know, die. Or if there's damage to their property. So maybe something like the garage door, I think we mentioned crashed in, on their car, some, some kind of injury to their property or themselves, and you're going to be probably sued for some type of negligence.

Okay. So that's what that's going to cover. And you want something that covers your neighbors. If the guests do harm to them or their property as well. Okay. So that's. Just remember the house rules book, the more you put in there, the more covered you'll be. All right. Another type of insurance you need is flood insurance.

So it seems funny for people like me who live in Arizona to have flood insurance, right. Because we don't have rivers or lakes or anything like that, unless you go up to some other parts of the, but not here down in the valley. There's nothing. So why would we have flood insurance here when it rains? The ground is so hard.

It's like cement. So it doesn't seep down into the ground. Like, like most places when it rains, you know, you, you think you get puddles, we get floods, entire streets, floods, entire highways, flood. I mean, it's crazy when it rains. We get these washes and people from other states, we'll see, there'll be a dip in the road.

And they'll say, do not enter when flooded. And what that means is if it rains and there's like a little water going over the road, people from other states, always, it's always somebody from Minnesota or something, or I, or is it. Vaping. Oh yeah. I can cross that. They have no idea how deep it is or how powerful it is or how quickly flash floods occur.

And so they'll just cross and into the, you know, into the wash and the wash can just, I mean, suddenly there'll be a big gush of water and then boom, their cars downstream. I mean, it's crazy. And these are dry, dry beds that never had water in. For months and months and months, we won't have rain. And then we do so even out here in the desert, we get flood insurance.

And I know that sounds crazy, but you need to look at where you are and, you know, go historically flood insurance is not most people it's not included in their regular insurance policy. And they'll say, oh, well it covers this and this and this, but it won't cover flood insurance. Our friend who lost her house in Hawaii to the volcano.

There's no real, such thing as volcano insurance. Okay. But her home was covered by fire insurance. So what was really critical for them were those drones that the government had flying around because they ha they got footage of the houses burning, and then they could prove that the house burnt down the Fort was covered with, well, You know, now it's 15 feet under lava, but first the house burnt down.

And so the house is covered, but lava would not be covered. So they're like, you really need to know what is in your policy. You really need to know what's going on and what, what can happen. And you need to know potentially what could happen and just cover your. If it doesn't happen very often, chances are the flood insurance will be really cheap.

So, you know, you don't have to worry about it, but better safe than sorry. One of those things, right. What you need to do. You need to know specifically what you want covered. And a lot of those questions in the beginning are questions that you can ask your insurance agent and say, am I covered for this?

Would I be covered for this? Would I be covered for this? Those are, you know, there are a great list of questions to have, because those are things you want to be covered against. But no, what you want covered and then know the value of what you want covered. So there's like all these little places online and little insurance companies that are specifically made for BnBs and there's one, um, oh, I'll remember in a second.

What the name of it is, but they have a $10,000 policy with a $250 deductible for $5 a night that they give. So $5 a night doesn't seem like it would be a lot of money, but it kind of is if it's only covering $10,000 worth of things to me, unless that property is pulling in enough money to substantiate the $5 night.

And I would have to look at all the contents that I have inside there because some of my small, small property. I have way more than $10,000 worth of stuff in them. Now, if I'm just doing it to cover the liability of something being stolen, then that's fine. The 10,000 I'm sure would cover that. But think about this.

I mean, if it's, if it's an unprotected area and somebody could take a truck and move your stuff out really quickly, how much stuff can they get? And if they were to break the windows, cause they cover windows and they cover all this stuff and they say, we cover all the. But think about how much windows are to replace.

Sometimes windows are very expensive to replace just a broken window, especially if there's tinting. If it's double paint, I mean, there's a lot of damage and just a window can be a lot of money or a patio door. Um, we've had patio doors get shattered and we're talking like a few thousand dollars to replace a door.

It's crazy. The amount of money those things are. So you want to make sure that you know, what you want covered and you know, the expense of all the things that you want covered and you want that limit to cover all those things. Not that that would happen. Hopefully it would just be a door. And if you think that's going to happen, then you're like, okay, I'm cool with 10,000, that'll cover just a door.

But if there's something catastrophic, you can probably get an umbrella coverage that would pay for things that, you know, weren't covered. But at the same time, I like to make sure that I have enough coverage on each of my properties. So maybe a little casita down in Tucson. Yeah. $10,000 would cover that.

But another one of my other properties with the three bedrooms with the furniture and all the equipment that we have in there, the, the electronics, the televisions, the blocks for the, you know, the plugs and I mean the, the little Bluetooth speaker systems and stuff. No, no, no. Just those few things. That would be, that would take that $10,000 already.

And, and it would be gone. So make sure you know, what you want covered and make sure you know, what it costs to replace those things that you want covered and know what you want the deductible to be, what you can afford to pay. Remember you want the best policy that you can afford with the best company that you can afford to pay.

Okay. Don't be cheap. It's your business and your business. You need to cover your. It's important. It is tax deductible, but obviously you're still going to be out of it in your pocket. So you need to know what you are willing to spend, know what you can afford. Okay. But there's a lot of options to way you're going to need to wait, what you need to cover.

Right. And what their coverage is, the limits of liability. Just like the one that we read with Airbnb, right? It had like the limitations. You want to know what all those limits are. You want to know any kind of exclusions. It's like, we cover this, this, but not this. You want to know what those things are.

You want to know what the deductible is like I said before, and then the cost that's going to be the last thing you consider. You're going to take all those options and you're going to get the best policy you can afford with the best company. Okay. It's really important that you do that, because again, this is your business.

So I already said that there are different types of policies and you should have liability. Now, like I said, Airbnb has their little liability thing and it should cover a lot of stuff, but it won't cover everything. So you will want to make sure that you have some kind of coverage that goes over that an umbrella or.

You might want flood insurance depending on where you live. Right? You should have some kind of comprehensive commercial insurance. That's going to be the main kind of insurance that you're looking for because you are a business. So it is a company. So remember it's gonna be. Uh, comprehensive commercial, you know, or some, some people call it commercial insurance.

Some people call it comprehensive commercial insurance, but that's the type of insurance that you're looking for. And there are now because there are so many short-term rentals out there. There are now short-term rental income, property insurance policies, but you want to look at them. You want to look at the coverage and you want to remember to look at all those different things that you want to have.

Ask your questions beforehand, will it cover this? Will it cover this? Will it cover this? Okay. And again, your regular homeowners policy, your regulars landlord's policy will not cover most of those questions that I read in the beginning. They will not. And your agent may tell you that. So ask them specifically where in your policy, these things are covered.

If you can't find it, when you're reading it yourself, go to your agent's office, sit down with them and ask them to specifically point out to you exactly where your coverage is for any of those questions that we asked. Okay. You want to make sure they might not be doing it on purpose. They might think it's covered, but you want to make sure that it's covered.

So now commercial insurance, like I was saying that usually covers property and liability. A little bit of liability, your property coverage. You want to make sure covers your building, your contents, your homeowners should cover. If you're not renting it out and you are the only person living there, your homeowners should cover your home office.

But if you have people going in and out of your home and a guest, which is a paid guest, I should say comes in and something disappears out of your home office, you want to make sure that's covered. So you, you've got to make sure that your verbiage is very clear on who and what and how. Okay. So specifically you want to make sure that those things are covered in your business, whether you do it with one policy or another, it doesn't really matter.

Just make sure they're covered. And you want to have liabilities. So like we said, that's, if you're ever sued for any kind of injuries, usually it's an injury. Okay. There's also something called business income insurance, and I really, really recommend that you make sure that you have that, that covers a temporary loss of income.

And it's usually due to some kind of. Damage. So let's say if you're, you know, there was a fire in your home and things have to be replaced and you have to shut your BNB down for a month or whatever, while they're fixing it, it's going to cover that income loss. Also, if your, the person who does all the work in your business, if you're the person who does the cleaning and the painting and the hosting, and you're very, very.

As a host in your business, and you're there all the time with your guest. And you're the one who does the majority of work. You might want to think about getting some kind of disability insurance, just in case you get injured. So if you fall and you can't get up and you can't take care of a guest, or you can't make the beds, or you can't do what you normally do, if something happens to you, disability insurance will cover that.

And remember all these types of insurances. I know it sounds like, wow, I need a lot of insurance and, and you do, but they, they don't have to be very expensive policies and your business will cover it. All of this is tax deductible, because these are business, legitimate business expense. It, you just want to make sure you cover your assets.

Okay. Kiyosaki used to always say that he goes, make sure you cover your ass sets, cover your assets all with. And your business is your asset. It's the way you make money and you have to do it smart. You have to cover yourself. So disability insurance, and if you're using Airbnbs and stuff like that, remember when it comes to, especially when it comes to the liability and stuff, you can get these big umbrella policies, umbrella policies usually cover something catastrophic or all the extra little, you know, when everything has hit its limits, it's going to cover all that.

So those policies are really great. They're basically. Whatever, you know, whenever you hit your a hundred thousand dollar limit on this, we come in and we take care of the rest. So that's a really good policy to have when, um, there's a property. And it says, you know, let's say the house is worth $250,000.

Well, they might give you a $250,000 policy. And the next jump was a really big, expensive junk. But you said, okay, I'll take the two 50. If your house did burn down, it would probably cost you more than the two 50 to build it. And like, you know, just with the price of everything and the price per square footage and stuff, but an umbrella policy would pick up where that other policy left off.

Okay. So if there was something catastrophic umbrella policies do that. One thing I suggest too, and this is kind of a, this is the tip and a trick. So when you have guests make a reservation, always suggest to them that they get some type of vacation, cancellation insurance and even have links to your favorite ones.

And if they used American express, American express has cancellation insurance included with their card. So I always recommend people pay with American express if they can. Um, where are they? And that they get the vacation cancellation insurance. I'd love American expresses, but there's other ones too.

There's a bunch of different ones out there, but when you suggest that to a guest, it's pretty cool because it does something. It lets them know that, oh yeah, they've got a strict cancellation policy. So it puts the ball kind of in their court and says, Hey, what if I have to cancel? They're not going to give me my money back when you don't have any kind of cancellation insurance.

It's really weird because how many of you, and actually I asked this question online this week, how many of you have had guests who want to cancel at the last minute, even with your strict policy and they have. Over your head, a review. Like if you don't give me my money back, even though you had a strict cancellation policy, now, a lot of people will just say, screw it.

I'm not going to do it, but here's the deal. If they paid, they can still leave you a review. And if they leave you a crappy review, You can have your little rebuttal there and say they didn't even stay there, but why, why, why risk that? Because people are going to have to, they're going to see the bad review is going to make a mark on your stars before they get to your reviews.

They see your stars before they even get there. So if your review looks bad now, if it's the only one you've ever had, but you can nip that in the bud. If you just suggest to them giving vacation cancellation insurance, because when you do that, it basically says, oh, she's not going to give you my money back.

If I cancel, I better get this insurance or I'm not going to be able to cancel it really, it puts, it sets like a psychological precedent in there. And it lets them know that you're not gonna take a cancellation and just hand them their money back. Because if chances are they with it, they had to cancel them.

They call you say, gosh, that that's really sad. Did you get that cancellation insurance that I recommended to you? Oh no. Oh, that's kinda sucky because you know, we have a strict policy simply because it's, you know, it's what we do. We can't just fill those nights. Uh, on such a short notice. So I'm really sorry about that.

I wish you had gotten that. I mean, that's why I usually suggest it, but I wish you luck, so sorry. Boom. That's it. That's all, you know, Mike drop and walk away. I mean, it does set that precedent in their minds that they are less likely to come after you. And threaten you with those bad reviews and remember always to, and this brings us back to one of the golden rules is always, always, always, always, always use whatever platform you're using, their messaging system.

Do not ever take phone calls. From people who, you know, the guests that you have, you are always in communication with them. If you're there, obviously it can be in person, but if you're in person, you want to record everything. So it's so much better. I, you know, I do everything remotely and everything on Airbnb's platform, always through their text message.

If somebody messages me outside of the Airbnb platform, Or if they call my phone or they do anything else, I immediately messaged them on Airbnb's platform. And I asked them, what's wrong. You know, this is the only place we communicate. I will communicate with you here. I don't take business, you know, messages on my personal phone.

You need to be that kind of person. What that does, is it, it has, you have that whole conversation recorded right there. And it's literally your best friend when it comes to communicating with Airbnb and getting their pad review removed because air B and B can see if they're holding something over your head, don't ever reply to them on any other platform, but the Airbnb platform don't even.

I can't talk here. I'll talk to you on Airbnb, nothing. Okay. Because if they think you can see it on there, if they think you're going to answer it in any way, shape or form on another platform, they will keep using that platform. And that's where all the bad stuff is going to be done. And you want to have as much proof as you can have if ever it came down to it, it needs to be on the Airbnb or whatever platform that you're using.

It needs to be on their platform. It needs to be. There so that they have proof and they can see it. So always, always, always do that. Okay. So the company that I was thinking of is called my property, And I, I got that from somebody in one of the groups on Facebook, one of the Airbnb groups, and they said, oh, it's only $5 a night.

They have a $10,000 limit and a $250 deductible. And that's. But I need more than that. I'm like on some of my properties. It's okay. But I need more than that. A lot of people ask me what I use now. The majority of properties that I like to buy are the ones that have huge homeowners association fees attached to them and they do all the work for me.

Okay. So these are the properties I use there. Includes a lot of the insurances, um, the liabilities, their company covers all that stuff. So I never have to worry about it. I don't have to worry about bookings. I don't have to worry about cancellations. I don't have to worry about any of that stuff. And that's how I like to roll.

Having said that the ones that I have to handle, I've done all kinds of weird things, you know, gone to the brokers and. They change names constantly. So you'll have one policy for a year, maybe two years, and then it changes to a whole different company because the company is in Florida or in and out of business.

Like, you know, most people change underwear and it's just always going back and forth. But I did have a friend who recommended a company and I haven't used them for very long, but I did check them out on. The better business bureau. And that's where, I mean, I love checking now, companies on the better business bureau they've been around for a long time, they have a lot of really good reviews on there.

And they had one person who had a complaint and then they canceled the complaint when they showed them the proof that they had offered them a six-figure check. So the person was just trying to get a lot of money out of a very, very old. And they weren't going to be able to do it. So what's really cool about this company is they handle short-term rentals and they know the verbiage that you want, and you can tell them all the things that you want covered, and they will give you quotes on the types of insurances that you want.

So for instance, if you say, okay, I would like to have, you know, some kind of business income insurance on it, but I also want to see, you know, how much would it be extra if I had a little disability in there, blah, blah, blah. So you can they'll, they'll, they'll make it like a, a big stew and you tell them the ingredients and they'll quote you prices with without blah, blah, blah.

So I really liked this company. You can find them online. They are proper insurer. And like I said, they're an, a plus on the better business bureau, they've got a lot of great reviews. My friend recommended them to me. I haven't used them for very long and I'm only using them on one property right now.

Just checking them out and the other policies and the other property is having come due yet. So I'll probably switch over and use them. But here's the deal. You need to check out your own insurance companies. I know people love recommendations. I don't usually like to give recommendations only because I feel very responsible.

If, if somebody FC Rover, I really do, and I don't want that to happen. A lot of this is a trial and error. A lot of this is just learning it as you go look this stuff up and do your own due diligence trust. No one be like the X-Files guy, right? Just trust. No one just do it yourself. Those kinds of things are really, really good because.

It's just good practice guys. It's just good practice to go out there and do a little research yourself. You know, you lean on somebody else and you get screwed. The only person you have to blame is yourself because you trusted somebody else. That's the truth with anything. You know, I had a friend that I invested some money with him and it was right before the crash and he invested it in a place where it just, it, it was gone.

The money was. And we're really good friends and we're still really good friends. And every so often, he'll say even now, all these years later, he'll say, I'm, I'm so sorry about that money, blah, blah, blah. And I'm like, why do you bring that up? Why do you even? And he's like, oh, I just feel responsible. And I said, look, no one is responsible for my money, but me, that's my mistake.

That's not your mistake. You had nothing to do. Literally, I need to do my due diligence. And if I screw that up, then that's on me. It's not on you. If the market crashes, that's still on me, not on you. I should have been more careful. I should've seen the warning signs. There's these are things that you are going to have to do as a business owner.

So as your friend here, I'm being super. And let's get your plan for the future set so that everything will be okay if God forbid anything ever happened to you. Okay. Because we want to take care of our families. That's our, that's what this is all about. It's all about taking care of ourselves and our family trust.

No one. Remember when I used to get that bumper cigarette, I remember they used to have that bumper sticker for the X-Files. Okay. I just want to add a few more things here. Yes. We've used proper insurance and now for, I think that was 2017 when we recorded that. Yes. Guess what they are. My favorite they're my go-to proper insurance is now my guy and I will absolutely endorse them because they've never done me wrong.

So I always use proper insurance on everything now. And they're really, really. We just got a property where we added a hot tub. They didn't even up our insurance. And so, I mean, it's, it's such a great company backed by Lloyd's of London, which is the oldest insurance company on the entire planet. So I think I can now say that I genuinely back proper insurance.

And the other thing I wanted to say is I recommend you go to the national short-term rental association. And do a forward slash insurance. Okay. So national short-term rental and forward slash insurance. And there you're going to find a whole page. Of insurance companies that do nothing but work with short-term rentals.

And I mean, it's, it's amazing. Proper insurance is the number one there. Uh, then there's property protect Waymo, safely slice Generali red sky rental, guardian, and Pablo Pablo, I think we've mentioned before, or maybe just with our members. Pablo is a site where you can do travel insurance. So it's insurance for your guests and you get to create a little page on there.

And when they buy travel insurance, you get a little kickback from that. So it's kind of nice and it's definitely geared to you specifically. And I really like it. Pablo's great because we always recommend that our guests get travel insurance. So whether you're using travel guard, American express or Pablo, whatever you use, make sure that, you know, if you can get a kickback, get a kickback here, right.

That's a little extra income in your pocket. So again, go to national short-term rental forward slash insurance. Super easy to find. And they're going to have a whole nice list there for you of insurance companies. I think you will enjoy, but our favorite definitely is proper insurance.

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