March 10, 2026
#175 Protect Your STR Business: Are You One Misunderstood Clause Away from Bankruptcy?
What would happen if your short-term rental burned down tomorrow and your insurance company didn’t actually cover it? It’s a terrifying question, but it’s one you need to answer before the worst-case scenario hits your doorstep. Most hosts treat insurance as a “set it and forget it” task on their to-do list, but in our industry, that mindset is a ticking time bomb.
In this episode of the STR Sisterhood, I’m sitting down with Darren Nix, the founder of Steadily. Darren is an investor who built an insurance company out of sheer necessity after experiencing how difficult it was to protect his own portfolio. We are diving deep into the hidden risks you’re likely taking right now and how to protect your assets with total confidence.
The Homeowners Policy Trap
One of the most dangerous misconceptions in our community is that a standard homeowners policy is enough. It is not. Many of these policies specifically prohibit short-term rental activity in the fine print. If a major claim comes in and the adjuster finds out you were running a business on a personal policy, they won’t just ask questions—they will deny the claim.
The reality is that properties rented on a short-term basis historically have more frequent claims than primary residences. Insurance is all about risk assessment. If you aren’t upfront about your business model, you are essentially paying for a policy that may be legally void when you need it most. You have to be honest with your carrier to ensure they charge the appropriate premium and actually pay out when a pipe bursts or a guest gets injured.
Why Your Purchase Price is the Wrong Number
If you bought a property for $350,000, your first instinct is likely to insure it for that exact amount. However, your purchase price has almost no relationship with the actual cost to rebuild that house from the ground up in today’s market. Between rising labor costs and material surges, you could easily be looking at a rebuild cost that far exceeds your mortgage.
Imagine your contractor tells you it will cost $450,000 to replace your home after a fire, but your short-term rental insurance policy maxes out at $300,000 because that was your loan amount. That $150,000 gap is yours to figure out while your business is at a standstill. You must look at the replacement cost, not just what you paid at closing. A quick search for the typical cost per square foot to rebuild a home by zip code can help you stay in the right ballpark and keep your portfolio protected.
Insurance as a Safety Blanket, Not a Maintenance Fund
The secret to lowering your premiums while maintaining high-quality protection is simple: stop filing small claims. Every time an insurance company touches a claim, they lose money in administrative costs before they even issue a check. Small claims for $500 windows or $1,500 repairs make your policy incredibly expensive and can even lead to your coverage being dropped.
Instead, I want you to shift your mindset and treat insurance as your last resort for catastrophic events. As you grow your 7-figure portfolio, you need to build a reserve fund to act as your own mini insurance company for the “small stuff.” By raising your deductible to $5,000 or even $10,000, you could cut your policy cost significantly. You handle the minor annoyances, and your policy is there for the $50,000 disasters and million-dollar liability suits.
The Danger of the 30-Day Vacancy Clause
Darren shared a painful story during our chat about a property in Chicago that nearly cost him everything because of a vacancy clause. Most policies have a strict limit—often just 30 or 60 days—on how long a property can sit empty before the coverage effectively turns off. If you are renovating a property and your calendar is blocked for three months, you must notify your agent.
Bad things happen when houses are empty; pipes freeze, vandals find a way in, and there is no one there to catch a small leak before it becomes a total loss. For a few hundred dollars, you can usually endorse your policy for vacancy coverage. It is a simple, proactive step that ensures you aren’t left footing a massive bill just because your property was temporarily unoccupied between guests or during a renovation.
Matching Your Liability to Your Net Worth
Is $300,000 in liability coverage enough for your business? For most of the ambitious women in this tribe, the answer is a hard no. Litigation is expensive, and that amount might barely cover your legal defense before a judgment is even reached. If you lose a case, any judgment over your policy limit is coming straight out of your personal bank account and your future equity.
A good rule of thumb is to carry liability coverage that matches your actual wealth. If you have assets, you are a “juicier target” for plaintiff’s attorneys. Liability insurance is relatively inexpensive to increase, and it is the ultimate protection for the life and business you’ve worked so hard to build. Don’t let one slip-and-fall accident erase years of hard work.
Step Up and Audit Your Coverage
Sister, it is time to stop crossing your fingers and hoping for the best. Pull out your policy this week and review your limits. Have a candid conversation with your agent and ask the hard questions about STR-specific coverage and vacancy limits. Protecting your business isn’t just about the “sexy” stuff like interior design and guest experience—it’s about building a foundation that can withstand any storm.
Are you ready to take your STR business to the next level with a community of women who have your back? Join the STR Sisterhood and let’s build those thriving portfolios together, the right way.
Click here now to listen to the full podcast.
HIGHLIGHTS AND KEY POINTS:
[00:59] A short introduction about our guest Darren Nix, and shares how personal frustration with rental property insurance led to founding Steadily
[04:53] Darren outlines the biggest misconceptions investors have about insurance before filing a claim, and explains why insurance should protect against catastrophe, not cover every minor issue
[08:49] Darren talks about Steadily’s national coverage and the rare exceptions to insurability
[10:11] Darren outlines the key differences between short-term rental policies and standard homeowner or landlord insurance
[13:47] Darren highlights common insurance gaps, especially underinsuring property replacement costs and emphasizes when insurance policies should be reviewed
[19:20] Darren explains insurance considerations when shifting from short-term to midterm rentals, including vacancy risks
[22:30] How to maintain insurance coverage during property renovations and extended vacancies
[24:35] Darren confirms it’s possible to insure his own properties and shares that Steadily’s very first policy was written on his own rental property in Indianapolis
[25:19] Darren emphasizes that the single most effective way to lower insurance costs is simply to avoid filing claims for minor incidents
[28:12] The importance of sufficient liability coverage for short-term rental hosts
[31:18] Darren advises key areas to review in an insurance policy and emphasizes that being proactive and informed can prevent surprises when a claim arises
[32:36] Darren explains insurance and safety considerations for house-hacking and STRs
[35:42] Darren advises new property investors to start locally and build the right support system
[48:11] The lightning round
Golden Nuggets:
- “What you paid for the house doesn’t typically have that much of a relationship with what it costs to rebuild the house.”
- “The single best thing you can do to reduce your cost of insurance is to not file a claim.”
- “I like to carry roughly the amount of my net worth in liability coverage, because the juicier target someone is the more aggressively a plaintiff’s attorney is going to go after them to get a payday.”
- “Buy a property in a city that you know very well, that you can keep close eyes on until you’ve built the reps of knowing the ins and outs, because there are so many surprises of things that will happen.”
- “It’s so important to surround yourself with people who push you and also are smarter than you.”
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