Squatting Has Become So Common In America That Property Owners Can Now Buy Squatters' Insurance

As rents continue to rise, squatting — where people move into unoccupied units and live there until they are forced out through the legal process — has become a hot-button issue for property owners nationwide. Just one squatter can devastate property and leave landlords with repair bills that run into the thousands. This explains why an insurance company recently announced they would be writing squatters’ insurance policies.

Proper Insurance recently announced it will begin issuing squatters' policies that cover landlords for up to $10,000 in legal expenses and $20,000 in lost revenue. This policy, which has no deductible, is available to landlords for a $100 annual premium. Considering the potential benefits, it's not hard to imagine Proper Insurance agents’ phones ringing off the hook.

Squatting has always been an issue for landlords, but rising home prices and rents have created a housing affordability crisis throughout America's population centers. One of the knock-on effects of that crisis is homelessness, but squatting is another. Any landlord who has ever dealt with a squatter can attest to the havoc they can wreak and the frustrations of trying to rid their property of squatters.

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The legal process for removing squatters is notoriously slow and can take several months. Making matters worse, landlords cannot stop squatters from doing tens of thousands of dollars in property damage while the legal process plays out. Horror stories of landlords who get their properties back after evicting squatters, only to find them looking like a hurricane hit, are commonplace.

Many have appealed to their legislatures for action and states like Florida have adopted much stricter anti-squatting laws recently. Proper Insurance looked at this situation and saw an opportunity to boost their business while giving landlords some much-needed relief. Purchasing a $100 squatter policy could save a landlord thousands in damages and legal fees. The low price and zero deductible make buying a squatter policy a no-brainer.

Proper Insurance Company co-founder Daniel Pettyjohn explained the company's decision to offer squatter policies: "Proper Insurance consistently leads the industry by addressing the evolving needs of short-term rental owners. Our expanded squatters' coverage reflects our dedication to providing the best and most comprehensive protection available on the market."

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Another big benefit for property owners in buying a squatters' policy from Proper Insurance is that the premium price is not location-sensitive. A Proper Insurance spokesperson told Newsweek, "Proper Insurance’s one-of-a-kind Squatters Coverage is a static rate meaning there is no adjusted premium based on location. It is a fixed rate for all 50 states and the District of Columbia."

Although squatters' policies will undoubtedly benefit all property owners, Proper Insurance believes they will be particularly beneficial to short-term rental operators. In a statement to Newsweek, their spokesperson said, "Squatters often find loopholes in a rental agreement, breaking-and-entering a property, or refusing to leave after the booking period has ended at a short-term rental." 

A scenario like that could be a nightmare for short-term property owners if a squatter situation develops during the peak rental season. That's why being able to fall back on a squatters' policy is such an appealing proposition. Once they discover a squatter situation at their property, Landlords would follow just a few simple steps to activate their coverage.

They need to file an unlawful detainer (eviction) suit against the squatter as quickly as possible and keep detailed records of any correspondence with the squatter. Then they would alert Proper Insurance about the situation and present the required documentation. If the squatting issue persists, it's not hard to imagine more companies following Proper Insurance's lead. In the meantime, landlords know who to call for squatters insurance coverage. 

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