If you own a short-term rental in California, you already know insuring it has gotten hard. Carriers have pulled back from wildfire-exposed areas, the state FAIR Plan covers less than people expect, and quotes for the exact same house can swing from around $2,600 to over $12,000 a year. It is genuinely difficult to tell whether you are properly covered or just overpaying for a policy full of holes. We recently shopped one California vacation rental across our full carrier panel and got four workable options back: Delos, Obie, a Steadily policy paired with the CA FAIR Plan, and Proper. They looked like four prices. They were actually three different kinds of policy, and that distinction is the whole game.
First, you are comparing three types of policy, not four prices
Before you look at a single number, understand what structure each quote is built on. This is where most owners go wrong.
A landlord or dwelling policy (Delos, Obie) is a residential form adapted for a rented home. It insures the building, some contents, lost rent, and liability, usually with fire and wildfire built in. It is one simple policy, and for a lightly rented or long-term rental it often gives the most coverage per dollar. The catch is that residential liability can be challenged as a business pursuit if you run a high-traffic short-term rental, and California wildfire coverage often comes with a percentage deductible.
A FAIR Plan plus a difference-in-conditions wrap (Steadily + CA FAIR Plan) is what you use when the open market will not cover fire. The FAIR Plan covers fire and almost nothing else, so you pair it with a separate difference-in-conditions policy that fills in water, liability, theft, and the rest. Two policies, stacked. It is often the cheapest path and sometimes the only path in the highest-risk zones. The risks are that the dwelling limit is frequently capped below your true rebuild cost, and a claim can stall in the seam between the two policies.
A commercial short-term-rental package (Proper) is a purpose-built policy for vacation rentals. It carries commercial general liability instead of residential premises liability, and it is designed around guest use: guest-caused damage and theft, amenity liability for pools and hot tubs, liquor and pet liability, and no vacancy penalty. It is the correct form for a property run as a real short-term rental business. It usually costs more, and its building and contents limits need to be set carefully.
The takeaway: a landlord policy, a FAIR Plan combo, and a commercial STR package are not three prices for the same thing. Match the structure to how you actually use the property before you compare cost.
The four options, honestly
Delos (landlord form, fire included). Where it wins: it insures the dwelling to full replacement cost with an added replacement-cost cushion, carries strong contents and lost-rent limits, and builds fire and wildfire into one policy, usually the best coverage per dollar for a lightly rented home. Where to look twice: a percentage wildfire deductible, often 10% of the dwelling, means you carry a large first chunk of a wildfire loss; the liability is residential, not commercial, so heavy guest use is a weaker fit; and equipment breakdown is not included.
Obie (real estate investment property policy). Where it wins: broad coverage with home-sharing host activities included, an added tenant-liability limit, and fire included with a flat deductible. Where to look twice: in this recent case it priced several times higher than the comparable landlord option, and its contents and lost-rent limits were lower than some competitors.
Steadily + CA FAIR Plan (fire via the FAIR Plan, everything else via a wrap). Where it wins: often the lowest total price, sometimes the only route to fire coverage in the highest-risk areas, with solid liability and fair-rental limits on the wrap. Where to look twice: the dwelling limit is often capped well below true rebuild cost, leaving a gap on a total loss; there are two separate policies to manage, renew, and reconcile at claim time; and contents on the wrap can be minimal.
Proper (commercial short-term-rental package). Where it wins: commercial general liability at $1M/$2M with liquor, pet, amenity, and assault coverage built for guest use; all-risk building coverage with a flat deductible and no wildfire percentage; plus guest-caused damage and theft, no vacancy penalty, and equipment breakdown included. Where to look twice: a higher premium than a landlord policy, base contents and business-income limits that can start low and need raising, and surplus-lines paper with fully earned fees, with earthquake a separate add-on.
What it actually costs
Here is the real spread from that placement, on a home with a rebuild cost in the low-to-mid $600,000s. We are showing the numbers because guessing at cost helps no one.
| Option | Policy type | Annual premium | Fits best when |
|---|---|---|---|
| Steadily + CA FAIR Plan | FAIR Plan fire + DIC wrap | about $2,656 (combined) | Fire is the only market problem and price is the priority; you accept a lower dwelling cap |
| Delos | Landlord form | about $3,042 | A furnished home, lightly or occasionally rented, and you want full rebuild coverage in one policy |
| Proper | Commercial STR package | about $4,300 to $6,000 (deductible driven) | An active short-term rental with guests, amenities, and real income to protect |
| Obie | Real estate investment property | about $12,201 | When its specific features are a match; otherwise usually outpriced here |
Real figures from one anonymized California placement. Your premium depends on the property, its rebuild cost, deductible, and carrier appetite the day you quote. Notice the cheapest option is not the best value: the FAIR Plan combo won on price but capped the dwelling roughly $200,000 below the true rebuild cost, which is money the owner would cover out of pocket on a total loss. Price and coverage are two different questions.
Questions to ask your advisor
- What would it cost to rebuild, and does the policy insure to that number?
- How is fire covered, and is the deductible flat or a percentage?
- How heavily do I rent it, and does the liability form fit that use?
- Is the LLC or entity carried correctly if the property is owned in one?
- What happens to my liability and lost income if something goes wrong?
The questions that actually decide it
You do not need to be an insurance expert. You need honest answers to four questions. What would it cost to rebuild, and does the policy insure to that number, since an underinsured dwelling is the most common and most expensive mistake in California right now. How is fire covered, and is the deductible flat or a percentage, because 10% of a $600,000 home is $60,000 out of pocket before coverage kicks in. How hard do you actually rent it, since a few weeks a year is a different risk than a booked-solid rental with a hot tub, and heavy guest use points toward a commercial liability form. And what happens to your liability and lost income if something goes wrong, because a guest injury or a months-long closure after a fire is where the limit and the policy form prove their worth.
So which is best? There is no single winner, and the right answer is the one that matches how you use the property. For a furnished home you rent lightly, a landlord policy usually gives the most coverage per dollar. For an active short-term rental with guests and amenities, a commercial package is the right form even at a higher price. When the market will only cover fire, a FAIR Plan combo may be your path, as long as you understand the dwelling cap. If you are weighing quotes like these, it is worth a line-by-line read of where you are covered, where the gaps are, and what it would take to close them.