STRSS 22 – Insurance tips from the Airbnb insurance expert w/ Kate Birtch

Video Transcript

 

 

00:00:00

Nobody likes talking about insurance. I don’t even like talking about insurance. It’s difficult to talk about, but you’re glad that you have it when you need it. You want to definitely make sure as you’re running a business, you’re accepting money for people staying in your house. No matter how much you want to think that it’s not a business, it is a business. And with that, you want to make sure you have the proper policies and coverage in place.

 

00:00:20

This is episode number two, two of the shorter mental success stories podcast. Welcome back to short term rental success stories. I’m your host, Julian Sage. This is a show where I talk to hosts about their journeys and starting and growing the short-term rental business. My goal is that you’ll be able to walk away with practical information. That’ll help you become a better host and learn how to scale your business. Like any exceptional hosts that we all strive for five star reviews. So please go on over to iTunes and let us know what you enjoy as it really helps support the show. If you haven’t done so already going over to a Facebook group, the host nation to connect with the community and other professional hosts that have been featured on the show. What is going on host nation? I just wanted to let you know that this is the second episode.

 

00:00:58

So out of the files that I did accidentally delete, this was the second one that was apart of that batch of files. So I’m very, very sorry, guys. I really wish I could be providing top quality audio, but unfortunately mistakes do happen. So please bear with me on this episode, but it is very, very good because we had the honor of speaking with Kate Birtch, who was previously on episode number two on the show used to be called Airbnb success stories. But Kate is a host that has multiple properties and is also the founder of property protect a short-term rental insurance company. That fills a pretty unique space in between Airbnb’s resolution center and your primary home insurance. So in this episode, Kate educates us on what to look for in insurance, what you need to be covered for, with the different types of business models, such as like subleasing and co-hosting what property protect covers and the steps you need to take when an incident does happen. Now, I know insurance, isn’t always the most exciting thing, but this is something that is vitally important for your short-term rental business. So please enjoy you’ll take so much from this episode and I’ll talk to the host soon. If you’d like my show notes for this episode, go to Short Term Sage dot com backslash STR Tutu. Or if you’d like my show notes sent directly to your inbox every week, then go to Short Term Sage dot com backslash show notes with all that being said onto this week’s conversation.

 

00:02:16

And you will come back host nation to another episode of short term rental success stories. In today episode, I have a previous guest that was on the show, Kate Birtch, Kate, if you wouldn’t mind introducing yourself and telling the audience a little bit more about who you are and what inspired you to get into short-term rentals.

 

00:02:33

Thanks, Jillian. It’s great to be back on the show. My name is Kate Birtch. I am a hosts of a few properties around Hawaii and we have one and we had one in Vietnam and Cape town. I’m also the founder of property protect a short term rental insurance company. We offer all sorts of products like damage insurance, you know, insurance, homeowners, insurance that’s allows short term rental activity and general liability insurance. So

 

00:03:01

I want to th this is going to be an insurance episode. We’re going to be talking about that your, your, your product is pretty unique because it kind of feels that in between gap, if you wouldn’t mind giving it a rundown of traditional insurance, the Airbnb insurance, and then what, how property protect kind of works in between those two.

 

00:03:22

Sure. I’ll try to answer both parts of that. Insurance is complicated as we all know it. And sometimes it’s designed just to be confusing. We offer products called our automated damage policy and that product acts as another layer of insurance. So you don’t have to go back and make claims against your primary homeowners insurance. And so with that, we are able to sync with your booking calendar and review all of your upcoming bookings. And then every time a guest checks in at your property, we issue a policy for their specific dates of stay. You aren’t charged for any of the nights that you don’t have bookings. And we are able to work with any platform, or if you accept direct bookings as well, we’re able to use Gmail calendar to process those bookings. If you had a direct websites that you’re doing marketing for

 

00:04:16

Airbnb, everybody maybe thinks like, oh, I don’t need insurance, or I can just use my regular homeowner’s insurance because the Airbnb policy will have to be covered if you wouldn’t mind expounding on that a little bit.

 

00:04:27

Sure. The reason why I founded my company was because I went through a personal experience with Airbnb. Airbnb does offer a liability insurance. It’s called their host protection program, and they offer any sort of liability or bodily injury coverage for guests that stay on your property during their dates of stay. They, that is a separate policy. The host guarantee program is actually a marketing program. It’s not actually an insurance program and you can actually go into their terms and conditions and read that exact legalees language. They offer a way to monitor damage done during a guest stay. And with that, they are representing both the host and the guest, and can make the final call of who is at fault for the damage that occurred. I founded my company because I felt that it was a conflict of interest that they represented both the guests and the host and that because they are the merchant of record where they control the security deposit funds that you set on your listing.

 

00:05:37

I don’t really have an upper hand if damage occurs and they don’t award me, you know, the, the funds for the damage. So I felt very vulnerable in that sense. And that’s when I started to investigate an independent insurance and we created property protect. So hosts would always have a option to apply additional layers of insurance for each of their bookings. Our product is a host purchase product. We kind of act in a proactive host mindset where, you know, these are our homes. We’ve put a lot of money into the purchase price of them, and then the decoration and the rehab price to get them ready to open our doors to anybody that books. And we want to keep, keep them looking nice. And it’s, it’s terrible when damage happens, but it does. And so we do have that automated damage policy in place, and we have a lot of happy customers. We have a great claims process where everything is automated, just similar to the Airbnb process. Cause as a host myself, I didn’t want to spend a lot of time chasing the guests and asking them about the damage when I also was asking them for a review. So it’s put me in a better position as a owner.

 

00:06:49

You know, I, I want to expound on that. The Airbnb process with the insurance, how easily is it? Are you, is how are, how difficult is it to be able to mess up that claim process and then just not receive anything. Like I know that they have some type of stipulations with maybe like the, it has to be done before the next guest checks in and all these things. How does that work and how does property protect kind of protected from that type of situation?

 

00:07:19

Sure. So Airbnb requires you to upload documentation, pictures, estimated cost of replacement. You also are required to engage with the guests through their platform, and they have a process of 72 hours where they give the guests 72 hours to respond to your message, talking to them about the damage. Did they try to monitor that communication with you and the guests first, and then after that it transitions to their trust and safety team. And then there’s a trust and safety representative that’s assigned to your claim. And personally, I went through that and I think, you know, on the fifth or sixth day, and I hadn’t heard from anybody about the status of my claim, I was getting really frustrated because I didn’t know what to do with replacing the couch that was damaged of mine. And I actually, I think it took 14 days for them to come up with a conclusion.

 

00:08:11

And, you know, we have same day turnovers back to back bookings. You know, we, we, we have high occupancy with our different properties. And so I just thought, I kind of felt like they let me down in a way of, of not being responsive with property protects. We have a similar enrollment process and claims process where if you submit a claim, you upload photos, you upload documentation. You, we just confirm that all the information is correct and that this was the particular guest stay. And then we give you a claims notification that the claim was acknowledged and submitted with that. It will go through claims processing. We actually don’t involve the guests because we know that you’ve got a lot of things on plate and you’re just trying to, you know, get what was damaged or stolen, replaced or repaired. And so the claims processor will evaluate the claim and then contact you. And if they award a reimbursement, the reimbursement check will be sent out right away. So we have a pretty good turnaround. I think we’re, we’re averaging about 24, 48 hours now with, with processing claims. So we’ve been really happy with that.

 

00:09:19

So I know a lot of hosts, they they’re, they’re emotionally tied to the properties and let’s say someone ruins the towels, or they ruin this old table that they have. And maybe it’s just like, you know, what, when, when does it cross the line between just, this is the cost of doing business and when should I file a claim?

 

00:09:39

It’s a good question. And, you know, it’s hard as an I’m a host myself and, you know, w with our first property that we had, we had, you know, an average of six or eight reservations per month. And, you know, that’s quite a lot of people going through your home, you know, every day. And if you were living there yourself, you would treat things differently than if you had guests revolving through your door. So you have to kind of take a look at creating a fund for things that are just going to break from wear and tear over time. And those are things that that’s not designed for insurance, you know, like a broken one broken wineglass out of a set of eight, or, you know, a stained towel or do bay cover. Those are, those are things that you’re kind of accepting as a business person that are going to happen when you’ve got multiple reservations a month, things that are excessive, you know, like a broken table or scratches in, you know, floors, or, you know, someone paying on your couch. You know, those are obviously damaged type of situations, but you know, when you do file a claim and the insurance company asks, well, how old was the table? And you say, oh, it’s about eight years old or nine years old. You know, they’re going to look at that as you know, that’s kind of the cost of doing business and wear and tear on a regular item rather than intentional damage that a guests did that, you know, broke the table. So

 

01:11:10

Now how does Airbnb and property protects look at a situation? Let’s say you do have an older table that is maybe a little bit more, maybe it has sentimental value, or maybe it’s a little bit older. Maybe you don’t, you can’t, you know, if, if you bought it today, it’s not going to be worth it at the same price. How does Airbnb and property protect look at a item like that? If you need to file a claim.

 

01:11:33

So I am not able to answer on behalf of Airbnb, but I do know with my personal situation, they wanted to give me like, just a very minimal amount of like cleaning for the couch that got damaged. And so with that, you know, I wasn’t really happy about that because it’s not just something that could be cleaned. I actually needed to dispose the couch and buy a new one with property, for tax there’s different terms called actual cash value and replacement cost value. And that’s one of the things you want to take a look at when you’re looking at insurance coverage for your home as a regular homeowner’s insurance, are you going to be reimbursed with the claim with actual cash value? Which means like the, the price of it now being an eight year old table, and then, you know, depreciating it to the cost of it now, versus the replacement cost value of what you bought it at eight years ago.

 

01:12:26

And so with that, we look at, we, we offer replacement cost value for property protects. We also will ask the age of the table. You know, if it’s an eight year old table, we’re going to say, well, it’s eight years old. You know, it might need to be replaced. And always, I suggest this with any host, don’t put any high, valuable items that are sentimental and not replaceable in a short term rental, you know, you’re opening your home to the public. They don’t sentiments the table the same way you do. So I would not, I would restrict your nice decorating, you know, thoughts to your own home and not into a rental with items that can’t be replaced,

 

01:13:03

You know, but let’s say, let’s say I have a guest with the kid and they throw the remote at the TV. Let’s say it’s like a $500 TV. And maybe, maybe the guest is claiming they didn’t do that. Or it was outside. It was extenuating circumstances. And now Airbnb doesn’t cover extenuating circumstances, you know, or, or some, some, some type of situation comes up now with, if I, if I just have my primary short term rental insurance, then we’ll, we’ll cover more of that. The difference between a regular homeowner’s insurance and a short-term rental insurance. But if, if I wanted to file a claim, what what’s going to happen with my insurance company, if I try to claim like a $500 TV.

 

01:13:50

Sure. So, first of all, you want to make sure that you have short-term rental activity approved by your insurance carrier. A lot of folks don’t know that their regular homeowner’s insurance doesn’t cover them doing Airbnb or BRBO at their home. And the way that you can find out is call and ask your carrier and say, Hey, I’d like to do short-term rentals. I’m just getting some information on it. We’re not sure if we want to move forward with it. Does our standard policy cover that what you, what most insurance covers is the named insured. So that would be you Julian, like you own the home. You’re the named insured. It doesn’t cover Julian and eight different guests that are going to be revolving throughout his home, you know, for the month of August. So you definitely want to look into that, what exactly what exact coverage that your carrier permits.

 

01:14:47

And then also to answer your question about smaller claims, there is something called a clue report, which is kind of your track record for your property, with insurance. And with that, every time you file a claim, you have a clear report that’s attached to your address. And if you ever decide to change insurance carriers, or you want to add additional coverage, let’s say you’re in Florida and you need hurricane coverage. The first thing that the new agent or, or insurance agency will do is pull up the address clue report. And if they see that you have all of these $500 TV, $750 window repair flooring, they’re going to say, oh, you’re a high risk. And so therefore your premium rates are going to be a little bit higher because you have all these small claims. So what is really nice about property protect is you can actually use property protect as a layer to avoid filing a small claims against your primary homeowners insurance.

 

01:15:44

Now with a primary homeowners insurance, they also oftentimes require deductibles for like a $500 TV. If they’re hiring, let’s say, you know, a $500 deductible or a hundred dollars deductible, maybe it doesn’t really make sense to use your primary. W how, how does, and let’s say Airbnb, you know, the, the, you tried going through their claim process, but you know, things come up. Sometimes it doesn’t always work out. So how, how does property protect work and that situation with, with deductibles and what the

 

 

01:16:18

Sure. So we have our existing product is a $5 per night insurance policy. It gives you 5,000 in coverage. There is a $500 deductible. So anything over $500 would be covered. Anything less than $500 would be, you know, still not considered a claim. Or we would back that $500 out from the total loss. We are coming out with a couple of new products, hopefully in the next few weeks here that have $0 deductibles. And so they’re gonna just be a flat rate that the guests would pay, and it would give an allotment of coverage with $0 deductible. And so those types of products are put into place, not for, you know, the makeup stain towel or the one wine glass that broke. And you’re trying to match it to the whole set, but more or less like the guests drug, a chair across to your wood floors, and now there’s scratches all over them, or they stole your TV or the couch has ripped up or their cigarette butt burns in it, things like that, that are a little more significant.

 

01:17:23

No, I think that is just so cool. And, you know, even, even before, like, I didn’t, I didn’t realize until we just started talking that this is going to be a new product, that’s real enough, but I can just imagine, like, there’s situations, like, let’s say I have a guest that’s going to be staying for a month and I don’t know what they’re going to be doing in that property for maybe a month, but you’re is this basically, is this new product going to be able to cover like a month long stay and kind of protect me in case something happens? Like, you know, the TV breaks or they break the, the sink. I don’t know why that’s a trending thing. Everybody’s breaking sinks nowadays. Apparently. Is that a situation that for like a month long stay for this product, that it would be able to cover it with a $0 deductible?

 

01:18:09

Yeah. I I’d need to double check, but I believe we can cover up to 45, 45 days with that $0 deductible. So don’t quote me on that, but we’ll be rolling out some marketing information that has the exact details on that, but we are targeting, you know, corporate rentals, traveling nurses longer-term stays with that product as well.

 

01:18:29

Very cool. Yeah. I, you know, I, I wanted to get you on the show, Kate, because I think it’s a very, you know, I want to be able to highlight people that definitely are doing unique things in this space. And this is one of those things. That’s like, I, I don’t like insurance. I mean, nobody really likes insurance. I got to do a little fender bender with my car and then my insurance just skyrocketed. And it was like, man, well, let’s, you know, I mean, it’s, it’s good when it’s there. Like if the house, like, if my car caught fire or like, it was a collision, there’s other people involved, I feel like that’s where insurance is best suited is for like those major incidents. But you can’t rely on that when they’re, you, you have a business that is operating and there’s expenses that come up, you know, people, you know, ruin the floors or people break a TV. These things come up that you really don’t want to go to the insurance. Now I’d rather just leave that dented my car rather than having to file a claim and have that fixed. So I think, I think that that’s very unique, unique products. So I want to talk a little bit about insurance in this episode. What can we are? Can we just keep our regular homeowners insurance? Is that something that we can do, or do we have to use a vacation rental insurance?

 

01:19:40

I would suggest getting some type of homeowners coverage that allows for short-term rental activity. And typically those are commercial policies. And the reason being is, you know, as this industry evolves and we’re becoming more price competitive, or becoming more experienced, you know, competitive, you’re getting more guests that are staying. You want to make sure that you have proper Cub coverage proactively. So you don’t have a situation where you have a guest day, they slip and fell on your property or in the bathtub. And now they’re wanting to Sue you. They’re wanting to Sue your housekeeper. They’re wanting to see your HOA because your property is in a condo association. And really just making sure that, you know, you’re, you feel comfortable that if it were to happen where you have this lawsuit at hand, you have insurance as a first line of defense to be there for you too, to make sure that, you know, a guest doesn’t fall and then end up, you know, taking your property in a lawsuit.

 

02:20:43

So I would definitely talk with your carrier and re nobody likes talking about insurance. I don’t even like talking about insurance. It’s difficult to talk about, but you’re glad that you have it when you need it. Like you said before, you want to definitely make sure as you’re running a business, you’re accepting money for people staying in your house, no matter how much you want to think that it’s not a business that is a business. And with that, you want to make sure you have the proper policies and coverage in place. So the first thing I would do is take a look at your existing homeowners policy. See if it allows for any sort of, you know, guests, Vacation, Rental, commercial coverage, if it does not call your carrier first and ask them if they offer that type of coverage, because some don’ts, they only work with residential types of, of policies.

 

02:21:30

So if they do not, that you definitely want to find another option for commercial coverage. Then take a look at your coverage limits to, you know, with deductibles. Like, do you want to have a lower deductible? So you can make claims, or do you want to have a higher deductible? So your premium is lower annually per year. With that, you could also couple, you know, property protects for smaller claims and then a high deductible homeowners policy. That would be a good, you know, match. You also want to make sure that you’re covered properly for general liability. Like I mentioned, there’s more and more hosts these days that are using different distribution channels for their listings. And Airbnb offers, you know, liability protection, but booking.com does not. So as you’re, you know, putting your listing on all of these different channels, you’re opening yourself up to more management of the type of coverage that you need holistically.

 

02:22:27

So definitely make sure that you’ve got at least a million dollars in general liability coverage. I mean, any of us know that if somebody were to slip and fall and they broke their hip and they needed to go through surgery, the cost of healthcare, you know, for that is, could be a million dollars easily. Also take a look at if you’re a host or co-host or property manager. See if you’ve got errors and omissions know coverage, because if you’re managing on behalf of owners and I guess we’re to slip and fall on the property and Sue everybody involved, the guests could, or the owner could Sue you as the property manager or the co-host and say, Hey, you put a rug on this, you know, wood floor and it slipped and that’s your fault because it was negligence. And so now the owner suing you and then the guest is suing the owner. It’s just a big, you know, circle of, of a mess. So Arizona mission’s general liability homeowners that allows for short-term rental activity. I would check all of those when you’re looking for proper coverage.

 

02:23:28

I, I want to step back and cover because for a lot of people, this is like the first business. This is like the first time that they are starting. So a lot of these things like Arizona missions, general liability, you know, extra coverage, you know, insurance that’s specifically for a Vacation Rental business. It can be maybe overwhelming for some people. So for, let’s say for the, for the host that is just starting off, they don’t really know where to start. Can you kind of walk through the steps of the, the insurance and what they should be looking for in order to have a operational business that will protect them fully?

 

02:24:13

Yeah. So we do offer full coverage, homeowners quotes that allow for short-term rental activity now. So we can definitely get you a quote. We need your property address, your contact information. One of the ladies in our office will ask details about the house, the age of the house. If there’s a pool or you buy a lake, are there any buildings attached, things like that that you normally give to, you know, any insurance agency you want to look at what the total value of your house is. If you just put a whole bunch of luxury upgrades and finishings in your house, and your assessed value is lower than what you have rehabbed it, you want to make sure that the insurance covers the total amount that you feel that the house is worth and all the valuables inside. So you making sure that if the house were burned down, because the guests left to gas stove, you know, burning that that total amount is covered, not just what the actual cash value might’ve been. You wanna take a look at all your home contents and have some sort of number that you’re giving your insurance carrier of like, okay, everything in my house is probably worth about, you know, $20,000. So if the guests were to come in at, with a moving truck and take everything out of your house, you know, you could file a claim and it would be for the actual amount.

 

02:25:33

You wanna take a look at liability coverage and talk with them and say, well, what’s average for this area. You know, I’m doing short-term rentals. So I’d like to make sure that I at least have one or $2 million in liability coverage and liability coverage can be broken down into you can also have it loss of income. So if something happened in the house and you were unable to use it now for future bookings, you could have loss of income coverage. And so with that, I think those are kind of the main different line items that you want to discuss with a carrier errors and omissions insurance would be, if you’re kind of at the next step of hosting and you’re starting to co-host or property managed, you wouldn’t necessarily need that just as a single owner operating one or two or three properties that you own yourself

 

02:26:22

With that. So a couple of different scenarios that I want to throw out at you. So let’s say you are a subleasing, the unit you’re in the more rental arbitrage space, what type of insurance would you be getting and what, what would you, what would you recommend?

 

02:26:38

So if you’re doing rental arbitrage, essentially you are, you are not the owner of the, you have an agreement with the owner of the building that you’ll be subleasing it from that you’ll be leasing it from them and then subletting it to other renters. So a hundred percent hands down, no question about it. I would get general liability insurance for your arbitrage company. And the reason why is because if your guests that was staying on the leased property, that you’re leasing were to get injured or something were to happen, they could Sue the owner and the owner would not, you know, know what’s going on because they’re the owner of the property. Every state is a little different on how they characterize the stay, but you don’t want to put yourself or the owner at risk. And so general liability insurance is not very expensive depending on what state you’re in and how much coverage you need.

 

02:27:36

It can be sometimes less than that, around $500, $2,000 a year. It just depends. But I would absolutely get that because if you’re running arbitrage and you don’t have any sort of insurance coverage, you’re setting yourself up for something potentially really bad to happen. And the other thing you could do, Arizona missions insurance, because if a guest were to slip and fall and the owner they’re suing the property now, so the owner, because they said, oh, the step wasn’t attached to the, you know, the, the stairs appropriately or something, and the guests sued every body involved, you know, the property owner, or you let’s say the housekeeper too, the owner could come back to you, the person who has the master lease on the property and say, you didn’t with uphold your, you know, maintenance with the property. You said you would, and now I’m being sued.

 

02:28:29

So I’m going to Sue you for negligence of operating the property. So you want to make sure, and I’d keep saying Sue and lawsuits, and, you know, insurance is, is put into place for these bigger types of events. It’s not always the small claims, but it does happen. And you, you just want to make sure that, you know, arbitrage is kind of a next level after co-hosting and property management, because you’re running, you know, dozens or hundreds of units at a time and not being properly insured for that. It can be really scary. And there’s a big host that we all know Heather Bayer. She went through being disposed because of the Arizona missions lawsuit. And it took two years for them to actually come through to the deposition. And so, you know, if you can just think about the number of hours it takes to host, you know, versus host, while you have a lawsuit going on, it’s something that nobody really wants to deal with. So

 

02:29:28

Now general liability, general liability trends and errors, and emissions is the separate from Vacation Rental insurance.

 

02:29:36

Yes. Arbitrage. They can’t actually get homeowners insurance because they’re not the owner of the building. They could potentially talk with different carriers about being added as an additional insured, but that varies by state, you know, by the master lease and everything. So it gets a little complicated. So yes, those are separate types of commercial policies that you would have.

 

02:29:59

Is it needed to be like a specific to short-term rentals for the general liability in Arizona missions? Or can it just be like a general, like a white across the board?

 

03:30:10

Typically, when we take an application in, we ask what industry you’re in, we ask what the total sales volume is, what the nightly rate is just to kind of get an idea and a picture of what type of business you’re running. I believe most carriers would ask those same questions as well, because you’re, you know, short term rental Vacation company is going to be different than a skydiving instructor or, you know, a roofing company or something like that. So they categorize them differently.

 

03:30:36

Now, what about for the property owner? Does the owner, not the one that you are, if you are subleasing a unit, the owner of that unit, do they have to get a specific type of insurance?

 

03:30:50

They should also have homeowners insurance that allows for short-term rental activity, just in case it were to ever track back to them. You know, if they had to file a claim because the guests slip and fall on their property. And then it turns out that their insurance only covered them as the owner, as the named insured. They don’t want to find out after the fact that, you know, the coverage isn’t there when they need it. So

 

03:31:17

Now what about for co-hosting? You don’t own the property, you’re just managing it for someone else. What type of insurance do you need for that?

 

03:31:27

Depending on what level of co-hosting you’re doing some people just manage guests, communication, some manage the housekeeping and the maintenance, you know, some do everything, including all that accounting and bookkeeping for the property. I would definitely look at general liability insurance, because if you’re doing more of, kind of a hands-off for the owner, but full hands-on for you by managing the housekeepers, you want to protect your little co-hosting company, you know, and you want to make sure that if anything happens, it’s not going to track back to the owner. So I look at general liability, I look at errors and emissions as well. You just want to make sure that nothing can get tracked back for negative negligence on your part. You know, things happen. Sometimes guests do weird things. You know, we had some guests flip up all of our furniture once and it was all upside down and I’m like, well, this is crazy. They can trip over things, but, you know, you’re dealing with kind of general public and people from all over the world. So people do things differently. So you just want to make sure that if you’re running a business where you’re managing on behalf of an owner, you don’t put the owner in a vulnerable position with a potential, you know, a lawsuit or, or issue in the future.

 

03:32:39

So, so what about though, let’s say someone does throw a party. There’s a bunch of broken stuff. Is, is it should, should people still be going through the Airbnb process? And I imagine that can be complicated because you also have to itemize everything and do all of this. And they, they want things maybe by certain timeframes. How does will Airbnb cover the, let’s say like, if someone throws that party breaks a bunch of stuff, or it, should you just go straight to insurance or do you use property protect? Where, where does that?

 

03:33:12

Yeah, it’s a hard question to answer. And I can’t give a definite because it’s all case by case, you know, but with that, I would definitely use Airbnb as a first, you know, source, because for instance, we just had a claim come up. There was a guest that there were bullet holes shot in a house. And I guess some guests were like shooting clays and guns in a field or something. And, you know, the, we asked the host if they contacted the guests through Airbnb. And if they could show us, you know, proof that they, they got, you know, acknowledgement from the guests that this happened. So you might want to start with Airbnb and involve the guest and say, Hey, you know, I’m getting ready to file a claim with Airbnb. I see this damage happen not only to get Airbnb involved because we don’t want, nobody wants guests like that running around in the ecosystem, but also because your, your other insurance might want some sort of proof that you reached out to the guest and see if they acknowledged it. And if you got a police report and things like that. So I would start with Airbnb and then work with the insurance.

 

03:34:17

So you, you, you, you started with Airbnb, you’re working with the insurance. Someone shoots a clay holes into your home. Let let’s say the guest doesn’t want to acknowledge that they, they do that. Now. You’re kind of, you’ve had to push Airbnb aside. Now, let’s say, you’re, you’re working with your primary insurance and let’s say property protect. Where does that kind of work?

 

03:34:40

It gets a little gray, but you could go to your primary insurance and say, Hey, I tried to re you know, contact the platform. I here’s my documentation that I reached out to the guests. I haven’t gotten any response. At least the insurance company knows that you’re taking initiative to like, show that this damage happened and trying to resolve it with the guests. And so you can take screen grabs or pictures of that documentation to your insurance company, at least they know like, okay, you’re, you’re trying to progress this client forward as, you know, a legitimate claim. And it wasn’t, you know, bullet holes you shot in your own house or anything. So with that, then you would submit it to your, your homeowners insurance or property protect depending on the claim size and, and move forward with the claims process.

 

03:35:25

So where do you feel that would be an appropriate size to file a traditional claim with your Vacation Rental insurance versus maybe let’s say a property protect.

 

03:35:36

So I would say zero to $500, Airbnb, anything over 500 to 5,000 property protect anything over 5,000 homeowners insurance. And that kind of gives you like a progression of, of dollar amounts. And the reason why is, because what I touched on earlier about the clued boards is you don’t want to have a bunch of these small claims being attached to your property address and, and having, you know, police reports being attached to those with claims that are less than $5,000. So that kind of gives a nice progression of, of dollar amounts.

 

03:36:11

I imagine that this maybe starts to get a little bit more complicated when you’re managing multiple properties, because the let’s say you have the insurance underneath your company name, like an LLC, does that follow you with every property that you go? So you’d get another property and they’re looking at it like, oh, well, you manage this property and you have a bunch of those, those hits on your, your insurance provider. Does that follow you? So

 

03:36:34

Clear reports are attached to the property, not the entity general liability Arizona missions that would be attached to this

 

03:36:41

Last thing that I kind of wanted to hit on is, you know, you’ve got this unique product that can, like you said, save hosts money the way that they’ve maybe structured it. So what, what do you think is kind of like the optimal way to be able to save money if you were working with a property protects and insurance company

 

03:37:00

Saves money and what

 

03:37:02

So, like, let’s say you are able to maybe raise your deductible, or you’re able to maybe cut some things out of your insurance that maybe save you some money to cover yourself on the back end for the things that maybe are smaller. What are some ways that you can kind of structure your, your coverage to be able to protect your, your maybe smaller assets from the larger, larger, more expensive claims?

 

03:37:28

Sure. So, one thing I would do is take a look at what your deductibles are listed at. You can always raise your deductible. You could, you, most people, I think that have around a thousand dollars deductible, you can increase your deductible of 5,000 or even $10,000, you know, depending on the property value the contents in the home. So take a look at that. And with that, you can use, you know, property protects as a layer for those smaller, like sub $5,000 claims. And as you increase your regular homeowners policy deductible, your annual premium will go down. So that’s a savings area that they might be able to take a look at. You could pass off the cost of property, protect to the guests. You could increase your nightly rate by five bucks, or you could add in the additional fees in the booking settings, you know, if $5 or, you know, percentage of booking fee to cover the cost of that property, protect layer of insurance, some of our property managers do that.

 

03:38:27

So they don’t have to absorb, you know, lots and lots of premium on their end. And I would take a look at different carriers every year and, you know, shop and say, you know, we’ve got no claims history. We want to really, you know, streamline operation. We want to make sure we have the best coverage for the lowest price. You know, I wouldn’t just stick with one carrier because they’re able to offer short term rental, you know, activity, homeowners, insurance. There’s more options out there now. And to definitely, you know, get competitive quotes from multiple carriers.

 

03:38:59

I want to do a hit on this one, this, this new service that you’re going to be providing with the $0 deductible. How is that something that you can just easily like turn on and off, or do you have to be a prior customer, or let’s say, I do have a guest. That’s going to be staying with me for a month and I don’t know what they’re going to be doing. You know, I don’t want to open the door, you know, after they leave and just, I see a mess and it’s like, oh my gosh, where do I start? So how does that work?

 

03:39:23

Yeah. So we’re working on a new product. We’re calling it the security deposit waiver. And with that, there’s going to be a flat fee that the guest pays per stay. There’s a $1,500 coverage limit. And then there’s a $3,000 coverage limit. And with that, we’re trying to align your bookings with the booking calendar, with the policies. And so we will be issuing owners, property managers. Co-hosts a referral link that they’ll be able to send to their guests for them to pay for the security deposit waiver. And that could alleviate you from having to set, you know, a hundred dollars to $5,500 security deposit. The it’s a flat fee that the guest pays. There’s no refund afterwards. It’s just a nominal fee. And it gives them a certain coverage limit. There’s a $0 deductible for that. And we don’t, we aren’t involving the guests right away with that. So if the guests purchases the policy, the guests, you know, leaves, and the host finds out that there was damage, the host would contact us, file the claim. We process the claim with photos and things like that. And then they would get reimbursed for any damage.

 

04:40:36

Is this something that can just be like easily turned on? Like, can I just like contact property protect and be like, Hey, I’ve got a guest coming, or do you have to have an existing policy with, with the guys?

 

04:40:48

It could be w we, we don’t like to have turn off and turn on policies, because what happens is it’s gets to be really gray with check-in check-out dates of which guests did the damage. So we prefer that they have all their guests use the security deposit waiver, but we realized that with the industry evolving and people accepting direct bookings, but also accepting, you know, in platform channel bookings, that there are various different options. And so we will offer it for direct bookings or, you know, if you’ve got a home that you only rent out once or twice a year, you know, we would cover, we would offer that product for, for those reservations as well.

 

04:41:29

Well, yeah. Thank you. Thank you so much, Kate. I think, you know, it’s really, it’s really nice to be able to educate people on just, just if you’re just starting off and you’re learning about all of this, this is a very nice entry and gateway to just learn about, you know, the different types of steps that you should be doing to better cover yourself. Like you were saying, you know, other bear she’s gone through this, this lawsuit that, you know, just because she didn’t have those errors and emissions in check. So you, you definitely wants to be covered. You want to be protected. And I think it’s very cool that you’re filling that, that gray space in between, if anybody has any other questions, what would be the best way to reach out to them?

 

04:42:09

Sure. They can email me anytime. It’s Kate’s at my property, protect.com or we have a little website chat too. You can reach out that way. Just go to my property, protect dot.

 

04:42:20

Very nice. Well, thank you so much, Kate, for, for taking the time to educate the, the host nation. And until next time they should keep on hosting. Thanks

 

04:42:28

Dylan. Have a great one.

 

04:42:31

Hope he hosts benefit from the show. If you found value, please go on over to iTunes, leave us a review and let us know what you enjoy about the show. If you’d like to talk to hosts that have been featured in these episodes, as well as the community go on over to our Facebook group, the host nation, talk to your hosts and the next step. So to keep on hosts.