Insurance shakedown sort of but not really
 

Asked my insurance agent that I need the policy on the vacation rental changed from me to our LLC. We went from a regular monthly rent to daily and changed the deed to the LLC. He says this is no issue and will get back with

The policy goes from a flat yearly fee to a percentage of the money the rental makes. This also comes with yearly audits of gross receipts, and if the estimate was low I owe more, and if less then they give me a refund. I felt like the MOB just arrived.

Says being commercial policy it depends on how many people go thru the place, and shows me 2 different print outs, one more then the other based on gross receipts. I take a quick look and say, one is more then the other based solely on the funds not people. If I have 50 stays at 100 a night = 5000, or 50 stays at 300 a night = 15000, and only thing the changed is the price of the lodging, not the amount of people.

Like the MOB comes into a store and ask for a percentage or else, without the or else part.

So what was the bottom line difference in price?
Mr All Dodge paid?
AllDodge LLC pays?

I can see the reason for counting the "stays" but as a percentage of $$$ that seems insane.

Long term rental was 1300 yr
Short term based on 15K gross income is 2000 maybe more maybe less depends on how much it makes (hope more)
LLC pays

Agree, I can see the number of stays, but the number of $ I don't

Just found Proper Insurance (Cover holder LLoyd's) online out of Montana and submitted for a quote, waiting to hear back. There is also CBIZ but have not yet asked for a quote

All Dodge- I have found that many commercial policies are audited at the end of a period and you either pay more or get a credit. The actual premium estimate is based on the numbers that you give them, but in hindsight if the exposure was greater, then you pay more. In another scenario, if you tell a carrier that you want to insure $50k worth of inventory, but at the end of the year they find that your average level, in reality was $200k, they will want to be paid more, as there risk was higher. If you had a fire and you lost $200k of inventory, they would have paid it, but only because it was in the policy that it would be audited for accuracy at the end of the year. If you did not agree to the audit, they would cap any loss at $50k. By the same token, if your average inventory level dropped to $25k, they would give you a refund, as their exposure was less. It is pretty much the way of commercial policies as the risk and coverage's can vary so widely.

In Florida, we found it tough to get anything but liability on our house when it was in an LLC (we rent it out when not there). We brought it back into personal ownership and was able to get better coverage. With a large liability umbrella, I am comfortable with the risk/reward of it being titled personally.

Agree when viewed from the inventory side, but my issue is a short term rental has no inventory

USAA was $500 cheaper then Proper but did ok but had short comings, and they used $101 a square foot replacement.

Wound up going back to KFB and its $900 less then Proper. Coverage is better then USAA but not as good as Proper. If the house wasn't under an LLC I would go with Proper hands down. Same if it was the house we lived in even part time. Don't see anything happening, but if it does and has the worst outcome, and we loose the house, that's all they get, we are still protected.

Will look at it again next year