Family entering a vacation home

If you’ve found your way to this page – you’ve likely decided that you’re ready to invest in short-term rental insurance. Congratulations! You’re on the track to success.

In this blog post, we’re going to give you a rundown of all the important differences between STR Insure, a small boutique insurance company, and nationwide American Modern Insurance Group.

 We’ll explore:

  • A refresher on what short-term rental insurance is and why you need it
  • What the differences are between a small scale insurer and a large scale insurer
  • What types of short-term rental coverage to seek out
  • How to choose the best short-term rental insurer for you
  • Pros and cons of both STR Insure and American Modern


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What is short-term rental insurance and what does it cover?

Before we dig into the nitty-gritty, let’s get a quick refresher on what exactly short-term rental insurance is. Short-term rental insurance for a short-term rental property or vacation home is meant to protect the owner from liability exposure, and the property from guest damage, accidents, and/or natural disasters (such as fire and flood).  

  • Liability

We don’t like to imagine anything going wrong with the dream vacation home we’ve poured ourselves into creating, but the reality is that accidents happen. The insurance a host chooses must cover legal fees and liabilities if a guest injures themselves on the property. Guest injury is the biggest risk to hosts – make sure the rental is protected!

  • Property and belongings

That brand new white couch? It just met a bottle of red wine. A guest’s baseball got away from them, and the rental cabin now has a new crack on the window to repair. Even the most careful guests sometimes cause accidents. Protecting the property with short-term rental insurance will alleviate repair costs.

  • Rental Income

By now, this rental property is running like a business and it needs to be protected like one. When the unthinkable happens, and the property becomes unlivable, short-term rental insurance will help protect the owner from lost income. 100% reimbursement of income may not be possible, but the coverage it does provide can help carry the host through repairs without going into debt. 

Now that the basics have been covered, it’s time to look at the differences between short-term rental insurance companies such as STR Insure and American Modern Insurance Group. Let’s break them down:

What is the difference between STR Insure and American Modern Insurance Group short-term rental insurance? An overview:

STR Insure is a small boutique short-term rental insurance company currently licensed in Arizona, Colorado, Minnesota, Oregon, and Texas with goals of expanding. STR Insure operates as independent agents who search the market on a host’s behalf to provide tailor-made policy options. At the time of publication, STR Insure is operated by less than 20 employees, many of whom have personal experience as short-term rental hosts. 

American Modern Insurance Group is a large-scale insurer. They are widely recognized and have been in business for over fifty years. The insurance group has over 1,200 employees and works with their nationwide agency partners to find coverage for their clients. 

What does STR Insure and American Modern cover for short-term rentals?

STR Insure short-term rental coverage:

  • Unique to STR Insure is that they offer coverage for foundations and excavations, in addition to replacing the existing building, additional structure, and personal property policies. This means in the case of floods and fire, a host will be able to rebuild their entire property – from foundation to finish.

  • Protection from lawsuits, no matter the source of booking, involving personal injury and medical payments.

  • STR Insure allows hosts to select coverage from loss of income that third-party sites such as Airbnb’s free policies do not cover. If a host experiences a loss that makes the rental property unlivable – they won’t lose their entire expected income. 

American Modern short-term rental coverage:

American Modern offers packages for different types of vacation properties: short-term rental and occasional rental hosts

  • Short-term rental or vacation home coverage: For the host who intends to rent their space as often as possible. This package is most beneficial for properties that expect to rent at least 62 days per year. An example of this type of host: the property is located in a hot spot of downtown New York City near Times Square and never struggles for tourist visits.

  • Occasional rental or vacation home coverage: For the host who intends to rent their property less than 62 days per year. The occasional rental package is best for those owners who plan to live in the property for a portion of the year. Example: An older couple rents out their northeastern two-bedroom home while they “snowbird” in Florida.  

American Modern short-term rental packages include varying options of income loss, property damage, and liability coverage. These options are cheaper when bundled together to create a full short-term rental insurance plan. While their plans generally do not include furnishings, other structures, or pools and garages, special accommodations may be made on a case by case basis.

Mother and daughter looking out a window in a rental home

Which vacation rental home insurance is right for you?

Diversity of short-term rental coverage:

STR Insure: If hosts want to protect additional structures, personal property, and the foundations of the property, STR Insure includes this coverage. A unique aspect of STR Insure is that hosts can protect their property’s foundation or excavation area. This option is often left uncovered by most competitors’ packages, while foundations and excavation space often make up 12% of a property. 

Rather than selecting a standard package, STR Insure is operated by independent agents who will shop the market to create policy package options that are unique to the rental property’s specific needs. From there, the host decides what best fits their property. STR Insure knows that no two vacation homes are the same, and their services reflect that.

American Modern: American Modern’s coverage focus is on the property itself. They offer comprehensive plans without an age limit for properties in most states. Unlike many short-term insurers, American Modern does not require hosts to replace their current property residence insurance to activate their short-term rental policies. Hosts may choose between a short-term rental policy or an occasional rental policy depending on how often they intend to rent out their property. American Modern may offer some additional coverage, such as other structures and some personal property, but it must be discussed with an agent.

American Modern offers varying insurance vacation rental packages depending on the condition of the vacation home rental. Perhaps a property is a brand new space, ready to rent. Their Dwelling Special package would be a natural option. Or, a host may be looking to rent out their vacation home that has seen many a family gathering and needs some repairs. The Dwelling Basic package includes homes like this, with no age limit on homes in most states. 

Customer service for owners of vacation rentals:

STR Insure: As a boutique and smaller group, STR Insure boasts that they work to have an acting relationship with their clients. As many of STR Insure’s employees are short-term rental managers themselves, they offer resources for their clients and an open-door policy to call their agents and ask questions about the industry. STR Insure may not yet be as sophisticated as American Modern, but they offer accessible access directly to their agents that extends beyond the black and white of their contract.

American Modern: If customer service is a top priority when looking for a vacation rental home insurer then American Modern is a natural choice. From 2017 to 2018 American Modern had zero consumer complaints and only one in 2019. Their digital toolbox allows users to make changes to their short-term rental insurance policy, make claims, and make any payments online. However, American Modern only offers quotes via a phone call or email conversation with an agent and not independently online. 

Location of your short-term rental properties:

STR Insure: STR Insure is currently licensed in only five states, but intends to grow. If the property is located in Arizona, Colorado, Minnesota, Oregon, and/or Texas, STR Insure may be the personal touch the host needs to get started on the path to success. 

American Modern: American Modern is a nationwide company licensed in all fifty states. If a host is looking to rent properties outside of the above states and/or across state lines, American Modern offers bundle packages. Most states do not have a maximum age limit on the property. 

 Family in a rental home on the couch

Pros and Cons of vacation home insurance with STR Insure and American Modern

There is a lot to consider when deciding on the best protection for a short-term rental property. STR Insure and American Modern Insurance Group both provide quality service, and it's up to you to decide what special elements of your property fit best with each insurer. 

Every rental home is unique, and requires specific coverage. Before shopping for your short-term rental insurance, consider all of the complex elements of your property from foundation to furniture. A smaller firm like STR Insure can provide you with personal guidance, and a larger firm like American Modern can direct you from years of experience.

To conclude, below is a table overviewing what to consider when weighing the pros and cons of short-term rental insurance companies STR Insure and American Modern:

STR  Insure:

Pros:

Cons:

Provides foundations and excavations coverage

Not yet licensed nationwide

Income loss coverage

Currently, the residence insurance policy must be replaced with STR Insure’s policy for the building, other structures, and personal property protection. However, this is not uncommon

Corporations, LLCs, and trusts are accepted as named insured

Cell

Includes personal property and other structure coverage

Cell

American Modern:

Pros:

Cons:

Will cover rental property even if the primary residence policy is not with American Modern

Does not cover furnishings or other structures

Income loss coverage


Package options for different needs of short-term rental properties (Dwelling Basic and Dwelling Special)

Is less cost-effective if space is used for short-term rentals less than 62 days a year

Older homes are easier to get insured, most states do not have an age limit

Cell

Licensed nationwide

Cell

All in all, both American Modern and STR Insure can help protect you as a short-term rental host. If you are looking for short-term rental insurance that will cover your furniture, foundation and excavation site, loss of income, and you live in one of the five states where it’s offered, you may want to choose STR Insure. If you are looking to insure income loss coverage, and/or an older home that you don’t plan on renting out all year long, you may want to go with American Modern. Either way, your short-term rental is an important asset, and should be protected as such.   

Host Tools provides an automated, unified calendar for Airbnb and Vrbo hosts, allowing you to seamlessly list on both channels. Try it for free for 30 days today!

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