Choosing Vacation Rental Insurance for your Direct Bookings

STR insurance

By The Hospitable Team

Setting up your own direct booking platform is a great way to free yourself from the tyranny of booking platform fees. But what happens when your guests damage your vacation home or injure themselves during a stay?

You won’t have the safety net of your booking platform’s insurance, and your standard homeowner policy won’t cover you, either.

But don’t let this put you off having a direct booking strategy, as this is the best way to develop your brand, build relationships with guests, and increase your revenue. There are some top insurance providers out there who can help you get the best of both worlds: Independence from booking platforms and comprehensive coverage for your vacation home.

You can even get insurance built into the bookings website you create with Hospitable.com Direct, giving you comprehensive insurance for all manner of vacation mishaps.

Hosts recommend Hospitable.com Direct for hassle-free direct bookings.

You can build a fully-functioning website in minutes, accept direct bookings and avoid OTA fees.
Start now with a 14-day free trial.

Why do you need specialized short-term rental insurance?

If you’re taking a combination of OTA and direct bookings, you might think your existing homeowners’ insurance together with your booking platform’s guest insurance will cover you. 

Your existing home insurance might cover your property for damage and theft, but not while you’re renting it out to guests as a business. At the same time, your booking platform’s insurance only covers your property while a guest who has booked through the platform is staying there. This can result in some nasty surprises for homeowners if they try to claim for something that happened during a direct booking.

Airbnb’s new and much-hyped AirCover launched in November 2021 in an effort to get guests making bookings again after the post-pandemic decline in travel. AirCover’s insurance protection includes $1,000,000 liability insurance, $1,000,000 damage protection, as well as income loss, and pet damage protection. 

However, the claims process is far from streamlined. Hosts must first go through Airbnb’s Resolution Center, where they negotiate with the guest about who is responsible for the damage. Once this process is finished, Airbnb decides how much AirCover money to award for the claim.

Meanwhile, Airbnb insurance only covers damage caused by guests, so it won’t pay for repairs that a guest didn’t cause, for example, storm damage to windows, or reimburse you for a burglary that took place between guest stays. 

Facebook groups for vacation homeowners contain stories of Airbnb hosts thinking they were covered by Airbnb insurance, only to find out that Airbnb insurance didn’t cover their home for damage or theft when no guests were staying there.

Relying on short-term rental insurance from your booking platform could leave you facing expensive bills, and it won’t cover you for direct bookings.

The only way to make sure that you, your property, and your guests are protected is to take out specialized short-term rental insurance.

How much does vacation rental insurance cost?

The cost of your vacation rental insurance will depend on the type, size, and location of your vacation home, and also the coverage you want. 

If you already have homeowners insurance, you can buy a policy just to cover the days when you’re renting out your property to guests. Alternatively, you can choose comprehensive insurance that covers your property all year round and will protect your vacation home from fire, floods, and theft even when no one is staying there.

What should your vacation rental insurance policy cover?

Your vacation rental insurance should provide comprehensive coverage for the property and its contents, for bodily injury (liability), and for loss of income caused by damage to your vacation home.  

Property and contents protection

Damage to your property and its contents is the most common problem facing short-term rental hosts. You should ensure your premium doesn’t just cover a few broken glasses, but more expensive damage like smashed windows and flood damage caused by overflowing bathtubs. 

Some insurance policies only cover damage related to guest stays, which means you would need separate property insurance to cover the building itself being damaged by a fire or flood.

Liability

Guests don’t just damage property, they can also injure themselves by going for an ill-advised late-night dip in your pool, or falling headfirst down a flight of steps. Whether or not the guest can find fault in your vacation home for the accident, it’s worth having liability coverage, not just to cover medical bills but also for loss of earnings resulting from their injury. 

Loss of income

If your vacation home is badly damaged by a natural disaster or unruly guests, it could be weeks or even months before you can start renting out your property again. Insurance for loss of income will cover you while the builders are putting your home back together ready for your next booking.

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Questions to ask your insurance provider

The questions you ask your insurance provider will depend on the type of rental you have, whether it’s separate from or part of your main residence, or if you have mostly direct bookings or rely on an online travel agent (OTA) for business.

Here are some ideas of questions to ask your insurance provider:
● Does the insurance policy combine homeowners insurance with vacation rental insurance, or do I need to buy two separate policies?
● Does the insurance cover the property all the time, even when guests are not there?
● Does the insurance cover direct bookings as well as those through OTAs like Airbnb, Booking.com, and Vrbo?
● Does the insurance include: damage / theft / liability / loss of earnings?
● Does the insurance cover fire, flood, and storm damage to the property, like a more general homeowners policy would?
● Are policies location-specific, such as covering flood damage near a river?
● Is there a no claims discount?
● What is your claims procedure?
● Does your company waive the requirement to prove forced entry?
● What proportion of claims do you accept?
● How quickly do you usually pay a claim?
● Does the insurance policy include a guest screening process?

1. SUPERHOG

SUPERHOG provides short-term rental insurance on top of your existing homeowner’s insurance policy. Combining guest screening with damage protection, SUPERHOG helps protect vacation homes, hosts, and guests. At the same time, their Host Guarantee offers protection from $500 up to $5,000,000 for any damage caused by a verified guest during a stay. 

SUPERHOG integrates with Hospitable.com Direct and will cover your direct bookings as long as your renters are verified through their guest screening.

SUPERHOG customer Mateo Bradford says that SUPERHOG risk protection is essential to his business. He adds, “As a booking platform, we not only have to protect our travelers during their stays, we are also charged with ensuring that our property managers are covered as well. SUPERHOG gives us the right product at the right price.”

2. Safely

Safely provides short-term rental protection and guest screening as an add-on to your homeowners insurance.

Safely insurance offers property managers up to $1,000,000 in structure and liability protection, plus $10,000 cover on the contents of your home and guest’s belongings. Every Safely policy provides complimentary guest screening, so you can gauge what type of guests you want to rent your property.

What Safely’s customers value most is the way the company handles claims. According to Safely customer Natile e Riorda, “the claims process is insanely simple to go through, especially compared to other industry companies in vacation rentals. It’s also a really, really powerful thing when you can make a claim on something that isn’t necessarily accidental”.

3. Proper Insurance

Proper Insurance offers comprehensive insurance designed for short-term rental properties. 

As well as covering all the short-term rental aspects of property damage, liability, and loss of income, it replaces the property owner’s current homeowners policy meaning the building is covered for fire, storm damage, and theft, even when no guests are staying.

Underwritten by Lloyds of London, Proper Insurance describes its short-term rental insurance as “a homeowner’s policy, a landlord policy, and a business policy all wrapped into one!”

Short-term rental owners discussing insurance companies on Facebook recommend Proper Insurance because it is both a homeowners policy and business policy, and includes liability and loss of income.

4. CBIZ

CBIZ is another complete insurance solution for vacation rental owners. It covers all guest stays, regardless of whether they’re booked directly or through an OTA. 

As well as covering guest damage, liability, and loss of income for your short-term rental business, CBIZ’s policy includes homeowner coverage, and will rebuild your property, repair your swimming pool, and replace the entire contents of your home if necessary.

CBIZ gets great recommendations from short-term rental owners on Facebook who love how it combines homeowner and short-term rental cover in one policy. 

5. Allstate

Allstate offers a variety of policies for short-term vacation hosts. Their HostAdvantage policy offers additional protection for your belongings on top of your existing home insurance. 

It covers theft of belongings while your property is operating as a short-term rental business. Plus, if a renter accidentally damages your personal property, HostAdvantage can help cover what your home insurance doesn’t, up to $10,000 per rental host period. 

You can also get Allstate’s landlord insurance, for extra liability and income loss protection.

How to launch a direct booking website with built-in insurance

The best way to make sure you have comprehensive insurance coverage for your vacation rental is to make it an integral part of your direct booking website.

With Hospitable.com Direct, you can quickly and easily build a website specially designed to take direct bookings for your vacation rental, and insure it against unforeseen problems.

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With insurance partners like Superhog and Safely, Hospitable will protect your home from damage, liability, and loss of income. You’ll also benefit from guest screening through Autohost, which will help prevent damage from occurring in the first place.

You’ll not only get an insurance policy that protects your property, but one that integrates with your direct booking website, saving you time to focus on the most important thing: Taking care of your guests. 

The website you create with Hospitable Direct will give you a complete direct bookings solution with payment and tax processing, calendar synching across other OTAs, and a personalized automatic messaging system that will dramatically cut the time you spend answering guest inquiries.

The best solution for your direct bookings

Taking direct bookings is great for your short-term rental business, but you’ll need to take out special vacation rental insurance to protect yourself, your guests, and your vacation home. 

For peace of mind, create your direct booking website with a platform like Hospitable.com that offers a built-in insurance and guest screening solution. 

This way, you’ll get the best of both worlds: Independence from booking platforms and comprehensive coverage for your vacation home.

Hosts recommend Hospitable.com Direct for hassle-free direct bookings.

You can build a fully-functioning website in minutes, accept direct bookings and avoid OTA fees.
Start now with a 14-day free trial.
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