Choosing Vacation Rental Insurance for Your Direct Bookings
Many people consider setting up their rental booking platform which is one good way of freeing yourself from the platform fees and other complications. But the fear of the safety of your property and your guests remains a top priority, right?
You will have to choose your insurance plan as the safety net of the platform’s insurance is gone. Your regular homeowner’s insurance will also not cover such risks.
These might be some difficulties, but don’t let them be a roadblock to creating your rental booking platform. Many good insurance plans provide you independence from the platforms and risk coverage for your vacation home.
Why do I need specialized rental insurance?
Your existing home insurance policy will cover all sorts of risks like theft, damage due to natural calamities, fire, etc. but it will not cover your risks if you use your house as a rental for business. The platform’s insurance covers only those damages which occur during a guest’s stay, which means you cannot claim damages that occurred during your direct booking period.
You might have heard of the AirCover plan launched by Airbnb in November 2021, which has a liability cover of $1,000,000 and damage protection of $1,000,000. But the claim process is complicated and it’s not easy to get your claim money without lengthy negotiations and discussion with Airbnb’s Resolution Centre.
Also, only damages caused by the guests staying are covered and not the damages caused by other reasons like natural calamity or theft. Therefore you must not rely on the short-term rental insurance provided by the platform in case you want to start direct bookings.
Cost of vacation rental insurance
There is no pre-defined cost for any insurance policy. The cost of your vacation rental insurance will be determined by the size and location of your property and also by the things that are being covered in the insurance.
If you already are a homeowner, then you can simply opt to get insurance to cover the number of days the guests are renting out your property. Another option is you can opt for insurance that provides comprehensive cover throughout the year and will provide protection to your vacation home against fire, floods, thefts, and whatnot even when no one is staying there.
What should be covered in a vacation rental insurance policy?
An ideal vacation rental policy must provide comprehensive coverage for the property and its content, liabilities like injuries to guests, and also the loss of income caused by the damages.
Property & Its Content
The most common problem faced by the hosts of short-term rentals is the damage to property and its content. But, you should make sure that your insurance doesn’t just cover a few broken plates or glasses. It should cover bigger damages like broken windows, flood damage caused by water left running or overflowing bathtub.
You should take a very close look at the insurance policy’s terms and conditions and look if all the points you need are covered or not. In some cases, rental insurances cover only damages caused by the guests, which means you need separate insurance to cover other risks like fire and flood damages for example.
Liability
Liability means the amount you owe to someone. In some cases, guests end up not only damaging the property but also injuring themselves by doing some things like taking an ill-advised dip in the pool at night, or falling head first from the flights. It can be their fault but they might blame you. Whether or not such things take place, you should have a liability cover for covering the medical bills and also the loss of earnings resulting from their injury.
Loss of Income
In case your vacation rental home is badly damaged and it cannot be given out on rent, that means you are losing income. The damages won’t be fixed easily and it can take anything from days to months to get the damage fixed. It’s advisable to cover the loss of income caused by such damages under your insurance policy. This will cover your loss of income till the builders work on fixing the damages.
FAQ
The questions you might have or ask will depend upon the type of rental you have. But here are some questions that will cover the most common questions, but the list is not exhaustive, there can be many more.
1.Does the vacation rental insurance policy combine with the homeowner’s insurance or do I need to have two separate policies?
2.Does the insurance policy provide cover for say a year or just for the duration when the guests stay?
3. Does the policy cover all sorts of bookings including direct bookings and booking via OTAs like Booking.com, Airbnb, and Vrbo?
4. Does the policy cover damages from theft /loss of income /liabilities?
5. Does insurance cover the damages from events like fire, and natural calamities, like a regular homeowner’s policy does?
6. Is the insurance policy location specific? For example, flooding damage is covered only for a house near a river.
7. Is there any no-claim bonus/discounts?
8. What is the procedure for claim processing?
9. Does the insurance waive the requirement to prove a forced entry?
10. What percentage/proportions of claims do you accept?
11. What is the time duration of claim settlement once the claim is accepted and claim money is due?
12. Does the insurance policy include a guest screening procedure?
Some Good Options to Consider
1.SUPERHOG
SUPER HOG provides short-term rental insurance on top of your existing homeowner’s insurance policy. The insurance policy provided by SUPERHOG has guest screening with damage protection. The policy will protect the house, the guests, and the hosts. The Host Guarantee protection offers covers from $500 to $5,000,000 for any damage caused by a verified guest during a stay.
SUPERHOG has integration with Hospitable.com Direct, which will cover your direct bookings as well, but you will have to get the renters verified through their guest screening process.
One of the customers, Mateo Bradford says that SUPERHOG risk protection is essential for his business. He says that all his needs are fulfilled by SUPERHOG’s insurance and it’s the right product at the right price.
2. Safely
Safely is a short-term rental protection insurance and guest screening as an additional facility to homeowners insurance. Safely is integrated with Hospitable.com Direct and provides insurance for property managers up to $1,000,000 and liability protection, also it provides a $10,000 cover for the contents of the house and guests’ belongings. Along with the policy Safely provides free guest screening.
According to a customer of Safely Natile e Riorda, the claim process is very simple and easy to go through compared to other service providers. She also adds that “It’s also a really, really powerful thing when you can make a claim on something that isn’t necessarily accidental.”
Proper Insurance provides comprehensive insurance designed for short-term purposes serving rental properties. The policy covers property damages, liability, and loss of income. The policy replaces your regular homeowner’s insurance as it covers theft, fire, and natural calamities damage, even when no guests are staying.
Proper Insurance is underwritten by Lloyds of London and it’s described as a “Homeowner’s policy, a landlord’s policy, and a business policy, all in one.” The policy is one of the best because it is a combination of both Homeowner’s policy and business policy and it includes liability and loss of income cover.
4. CBIZ
CBIZ is another complete insurance solution for your vacation home. It covers your house during the guests’ stays, regardless of whether they have booked directly or via OTA
The CBIZ’s policy includes homeowner’s coverage and will rebuild your house, repair your swimming pool, and replace continents of your house if necessary, besides covering guest damage, liability, and loss of income for your short-term rental business.
5. Allstate
Allstate offers a variety of policies for short-term vacation hosts. Their Host-Advantage policy offers additional coverage for your belongings on top of your existing house insurance. If a renter accidentally damages your personal property, the policy will cover up to $10,000 per rental host period.
How to Launch a Direct Booking Website with Built-in Insurance?
The best practice to make sure that you have comprehensive insurance coverage is to make the insurance an integral part of your direct booking website. You can utilize Hospitable.com Direct to quickly build a website for taking direct bookings for your vacation rental and at the same time insure it against various risks.
The platform has insurance partners like Superhog and Safely, providing insurance facilities, and protecting you against damages, liability, and loss of income. You will also benefit from guest screening via Autohost, helping you prevent damages.
The website provides an all-around solution with payments, tax processing, and calendar synching across other OTAs and a personalized automatic messaging system, that will help in improving efficiency.
The Best Solution for you Direct Bookings
Taking direct booking is a good idea for your short-term rental business. But you will have to take special vacation rental insurance to protect you, your guest, and your property from unforeseen events.
You can create your own direct booking website with the help of platforms like Hospitable.com with ease as they provide a comprehensive solution that includes making your website, insurance, and other facilities that help you make your processes easy.