Darren Pettyjohn
Wister Insurance
Founder of Wister Insurance and former founder of Proper Insurance, the leading STR homeowner insurance product. Darren built Proper to 160 employees and 150,000+ policies before selling to Hub International (the world's largest private insurance group). He now runs Wister, the only insurance company focused exclusively on business insurance for vacation rental managers and co-hosts.
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Most property managers think they have business insurance. They paid for it. They put it in a desk drawer. They feel protected. But here’s the truth: if you’re managing someone else’s property and your cleaner pops an ice maker line that causes $100,000 in water damage, your business insurance probably won’t cover a single dollar. The exclusion is right there in the policy. You just never read it.
Darren Pettyjohn built Proper Insurance from his spare bedroom to 160 employees and 150,000+ policies before selling to Hub International, the world’s largest private insurance group. Now he’s back with Wister Insurance, and he’s solving a problem that affects nearly every property manager and co-host in the short-term rental industry: massive liability gaps that no one knows exist until it’s too late.
You’ll learn:
- Why most business insurance policies specifically exclude coverage at the properties you manage (and what that means when something goes wrong)
- The two types of coverage every manager needs and why most people only have one (or think they do)
- How Airbnb’s March 2024 policy change quietly pushed co-hosts with 6+ properties to get their own insurance
- The “air traffic controller” liability that small managers face when subcontractors cause damage
- Why you should call your insurance company immediately after any incident, even minor ones
We also talk about:
- The 14-month journey from hiring bankers to selling Proper Insurance for a massive exit
- Why Darren started grinding harder after the sale than he did in the previous three years
- The “reasonable person test” for property safety and liability protection
- Real examples of million-dollar wrongful death settlements in Florida
- How to document incidents properly so stories don’t change when lawsuits arrive years later
Mentioned in the Episode:
Follow Darren Pettyjohn:
- Email: darren@wister.insure
- LinkedIn: Darren Pettyjohn
This is Eric Moeller’s final interview on Get Paid for Your Pad before transitioning to a new CEO-focused series on the Freewyld Foundry YouTube channel. Subscribe for new episodes every Monday on YouTube, Spotify, and Apple Podcasts.
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Discovery of the Insurance Gap
Darren: Right now, you're a manager. Oh, I got insurance. I feel good. It's in my desk drawer. And you have no idea that you have no coverage for property damage liability at any of the properties you manage.
Darren: It's not a matter of if, it's a matter of when something goes wrong. And you're transferring that risk to the insurance carrier. Someone drowns in a swimming pool tomorrow and you get hit with a wrongful death suit, that Airbnb won't respond. I don't know. They may respond. We have settled multiple wrongful death, million-dollar drowning lawsuits in Florida. We've written those checks.
Darren: Insurance is a product you don't use. You go to Google, you get online, you fill out something, you get a policy, you throw it in your desk drawer, and you don't use it once every nine years. But when that day comes, you pull it out, you dust it off and go, God, I hope I have the right insurance. Right.
Eric: Yeah.
Announcing the Podcast Transition
Eric: I actually haven't announced this to the podcast yet. My team knows this, but I'm actually stepping down from the Get Paid for Your Pad podcast and we're switching it to a full revenue management podcast that Jasper is going to lead. And I'm stepping further into building and launching a YouTube channel series underneath the Freewyld Foundry channel.
What I love about this is it's appropriate that you're my last interview on this platform because you were my first interview in the Airbnb host summit that I did 10 years ago.
Darren: Yeah. Yeah. How crazy is that? First and last. What are the odds? It's funny how the universe works, right?
The Proper Insurance Journey
Darren: It was experience of a lifetime, really. I mean, it was 14 months from initially hiring the bankers to put the deal together and start shopping it. We were purchased by SPG, which is a division of Hub International. And they are actually the largest private insurance group in the world.
We narrowed it down to 16 companies. Then we got it down to five. And then the final three and the negotiating is quite an experience. I'm proud to say that they didn't let a single employee go. That was a big thing for us. On January 2nd, the high fives, the money's wired. And you're like, whoa. Hashtag pulled it off.
The Identity Shift After Exit
Darren: I was in the office by myself at night, just packing up my stuff. It was emotional. It's even a little emotional talking about it now because you put everything into that. And I'm fortunate in a sense that I didn't have time to slow down and builders build, right? It's just in our DNA. And literally the next week we were in a small office and I'm doing the whole damn thing over again.
The Four Categories of STR Insurance
Darren: When we think of insurance for the vacation rental industry as a whole, there are four categories. The first is the person or entity that owns the property. You need home insurance. That's proper insurance.
The second is the vacation rental management business or the Airbnb co-hosting business. It's no different than a coffee shop or a grocery store. You need business insurance. You own a business. That's what Wister does.
The third is travel insurance. And then really the fourth is the supplemental insurance, the nightly insurance that you see added on. That all started with Airbnb's Air Cover.
Core Coverage Requirements for Managers
Darren: You're a manager and you manage 20 properties, 200, 2000. You need business insurance. And that starts with commercial general liability, CGL. By definition, that's protection for any bodily injury or property damage that your business could be liable for as a result of your operation.
The second piece, which is often overlooked, is what's called professional liability, which is E&O or errors and omissions. That's protection for any financial loss that you could be held liable for as a result of the professional service that you provide. Those are the two core coverages you need as a vacation rental manager. You need CGL and E&O.
The Coverage Gap Reality
Darren: The threshold is probably 20 to 25 properties. If a manager or co-host has over 20 or 25 properties, they typically do have some type of insurance in place. But here's the problem. They go to Google and they buy a business insurance policy which has CGL and E&O. And they move on with life and put it in their desk drawer.
Well, we sold those same business insurance policies and they have huge gaps in coverage that the manager or co-host doesn't know about.
The $100K Water Damage Scenario
Darren: The first gap that's in virtually every one of our competitors' policies is they remove the property damage liability from the CGL. It does not extend to the properties you manage.
Perfect example. You're a manager. You manage 50 properties. You send your cleaner to do a full clean. They move the refrigerator. But unbeknownst to your cleaner, they pop the ice maker line. Water damage. Four days later, you come back to the property and you have $100,000 in water damage.
What happens? The owner files a claim with their home insurance. Then either the owner or the insurance company subrogates that claim back against the manager. And your business insurance? It specifically excludes coverage at the properties you manage.
Eric: Is that the CG2270?
Darren: That is CG2270. Right now, you're a manager. Oh, I got insurance. I feel good. It's in my desk drawer. And you have no idea that you have no coverage for property damage liability at any of the properties you manage.
E&O Coverage for the Air Traffic Controller
Darren: The E&O piece is really big for the smaller co-host model where you are an air traffic controller. You're subcontracting everything. You're the one hiring the handyman, the electrician, the plumber, the cleaners. Everything flows through you. You're a professional. And if any one of those people that you've subcontracted causes damage or harm, they're going to name you in the lawsuit.
Airbnb Air Cover Reality
Darren: As of March 2024, Airbnb updated their policy. If you are a co-host with six or more properties, you may be required at the time of loss to file with your own insurance provider. Translation: Air Cover is not business insurance. It never was.
Incident Documentation and the Statute of Limitations
Darren: Call your insurance company for everything. Even if it's minor. Because the statute of limitations for bodily injury is two to four years depending on the state. That guest who fell and twisted their ankle, gave them a free night, and moved on? They can come back three years later with an attorney and a half-million-dollar lawsuit.
When you call your insurance company, they send an adjuster. They document everything. They take photos. They preserve the story. Because stories change. Time passes. And suddenly that minor incident becomes a major lawsuit.
The Reasonable Person Test
Darren: We use the reasonable person test. If a reasonable person walked into that property and saw a wobbly railing, a deck that needed fixing, stairs without proper lighting, would they say this is dangerous? If the answer is yes, you need to fix it. Because a jury is going to be filled with reasonable people.
Building Wister
Darren: With Wister, we're setting up the C-suite tier much earlier than we did at Proper. I'm finding my key employees and setting that up earlier, which you can't do when you don't have money in the bank and you're your first startup. We're binding probably two or three new managers a day now.
The interaction and having purpose and something to do. We just hired a couple new sales reps and they're doing so good and they're making good income and they're so excited about it. Feeling that energy, having a place to go. Builders build.
