STR Insurance Providers Compared: Proper, Steadily, Foremost

Standard homeowner's insurance excludes commercial activity, which Airbnb-style rentals technically are. Operating an STR on a standard policy without STR endorsement is the most common (and most expensive) insurance mistake STR operators make — claims get denied, and even minor incidents can trigger policy cancellation. The right answer is purpose-built STR insurance from a carrier that understands the operating model. Proper Insurance, Steadily, and Foremost are the three dominant providers in 2026; Airbnb's AirCover bundle is a useful supplement but not a replacement.

What STR-specific insurance covers

• Property damage from guests (intentional and accidental)
• Theft by guests or third parties during rental periods
• Liability for guest injuries on the property
• Liability for guest injuries off-premises (some policies)
• Lost rental income from covered events ('business interruption')
• Legal defense costs for liability claims
• Vacation rental contents (furnishings, electronics, supplies)

Provider deep dive

Coverage limits to verify

Three numbers matter most. Property damage limit: should equal replacement cost of structure + contents (typically $300K-$1.5M). Liability limit: $1M minimum, $2M+ better given typical claim severity. Loss-of-rents coverage: 6-12 months of rental income at typical occupancy. Verify all three when comparing quotes; price differences often reflect coverage differences, not pure underwriting savings.

Tax-strategy context

Insurance premiums are deductible operating expenses on Schedule E, reducing taxable rental income directly. They don't affect cost-segregation calculations, which work off the property's depreciable basis. Cost-seg deductions plus deductible insurance premiums together can drive Schedule E to a meaningful loss, particularly in year one — useful for STR-loophole or REPS-qualifying investors. See cost segregation for Airbnb properties.

Frequently asked questions