If you’re a real estate investor, landlord, or property owner, here’s a question:
Do you know how to properly insure a rental property that accepts short-term rentals?
What about a seasonal home that’s only occupied a few months a year?
Or a property owned by an LLC or Family Trust?
How about a home that’s temporarily vacant while you’re looking for a new tenant or trying to sell it?
If you’re not sure, you’re not alone.
At Starwest Insurance Services, we regularly see property owners carrying the wrong insurance policy for their property’s actual use. Unfortunately, many don’t discover the problem until they file a claim.
Why Property Use Matters
Insurance companies care about one thing:
How is the property being used?
The answer determines whether a claim is covered and whether the policy was written correctly in the first place.
A policy written for an owner-occupied home may not properly cover:
- Tenant-occupied rental properties
- Short-term rentals (Airbnb, VRBO)
- Seasonal homes
- Vacant homes
- Properties held in LLCs
- Properties owned by Family Trusts
Each situation presents a different level of risk and often requires a different insurance solution.
Short-Term Rentals (Airbnb & VRBO)
Many homeowners assume their standard homeowners policy covers Airbnb guests.
In many cases, it does not.
When you’re collecting money from guests staying in your property, the home is operating more like a business than a traditional residence.
Questions we ask include:
- How often is the property rented?
- Is the entire home rented or only a room?
- What platforms are used?
- Is there a property manager involved?
- Is the home owner occupied?
The answers determine whether a standard homeowners policy, landlord policy, or specialty short-term rental policy is needed.
Seasonal Homes and Vacation Properties
A second home in Palm Desert, Big Bear, Lake Arrowhead, or the desert may sit vacant for weeks or months at a time.
Insurance companies view these properties differently than primary residences because:
- Water leaks may go undetected
- Vandalism risks increase
- Theft risks increase
- Delayed claim reporting is more common
Seasonal homes often require specialized underwriting and proper occupancy classification.
Simply telling your insurance company that the property is a “second home” may not be enough.
Properties Owned by LLCs
Many real estate investors place properties into LLCs for asset protection purposes.
The challenge?
Not every insurance company will insure properties held in an LLC.
Some carriers:
- Allow LLC ownership
- Require special endorsements
- Require the LLC to be listed as a named insured
- Require all members to be listed
- Refuse LLC ownership entirely
We’ve seen claims delayed simply because the ownership structure was not disclosed properly.
Family Trust Ownership
Trust ownership has become increasingly common.
However, the insurance policy must accurately reflect the ownership interest.
For example:
“The Smith Family Trust Dated January 1, 2015”
may need to be listed on the policy along with the trustees.
If the property title is held in a trust but the policy only lists individuals, it may create unnecessary complications during a claim.
Fortunately, many carriers can properly insure trust-owned properties when structured correctly.
Vacant Homes
One of the most misunderstood situations involves vacant properties.
Many standard homeowners and landlord policies restrict coverage when a property is vacant beyond a certain number of days.
Common situations include:
- Home listed for sale
- Tenant moved out
- Renovation project underway
- Probate property
- Estate property
Vacancy creates additional risks including:
- Water damage
- Theft
- Vandalism
- Squatters
- Delayed maintenance issues
In some cases, a vacant home policy may be required.
Homes Between Tenants
A property doesn’t have to be completely vacant to create insurance issues.
Many landlords experience gaps between renters.
Questions we typically ask:
- How long has the property been vacant?
- Is it actively being marketed?
- Are renovations being completed?
- Is anyone checking the property regularly?
The answers can impact eligibility and coverage options.
Common Mistakes Property Owners Make
Mistake #1
Using a homeowners policy on a rental property.
Mistake #2
Not disclosing Airbnb or VRBO activity.
Mistake #3
Failing to disclose LLC ownership.
Mistake #4
Failing to disclose trust ownership.
Mistake #5
Allowing a property to remain vacant without notifying the carrier.
Mistake #6
Assuming all landlord policies are the same.
They’re not.
Why Work With a Real Estate Insurance Specialist?
Every property has its own story.
The right insurance policy depends on:
- Ownership structure
- Occupancy type
- Rental activity
- Vacancy status
- Property location
- Liability exposure
At Starwest Insurance Services, we work with multiple insurance carriers and help property owners navigate situations involving:
- Single-family rentals
- Duplexes
- Triplexes
- Fourplexes
- ADUs
- Airbnb properties
- Seasonal homes
- Trust-owned properties
- LLC-owned properties
- Vacant homes
- Investment properties
Our goal is simple:
Make sure your property is insured correctly before a claim happens.
Need Help Reviewing Your Rental Property Insurance?
Whether your property is rented, vacant, seasonal, held in a trust, owned by an LLC, or listed on Airbnb, we can help determine the appropriate coverage options.
Contact Starwest Insurance Services
📞 Office: 714-893-7271
📱 Text James C.Q. Banh: 714-867-7799
🌐 Visit: StarwestInsurance.com
No broker fees since 1995.
Before your next renewal, ask yourself:
Is my property insured based on how it’s actually being used—or how it was used years ago?