How to Reduce Short-Term Rental Insurance Premiums for Your Properties

Short-term and vacation rental property managers take on many responsibilities, the majority of which are unique to the hospitality industry. With such high rates of guest turnover, managers must balance keeping those guests satisfied with protecting the investments of property owners. They also need to manage their budgets to afford their most important needs, including short-term rental insurance.

There is no magic formula with which one can limit or reduce short-term rental insurance premiums. Nevertheless, there are several things that you, as a property manager, can do that may unlock premium savings along the line. Many of them are fairly easy to carry out, while others may involve additional steps and collaboration with others.

With that in mind, here are some pointers on how to reduce rental insurance costs and strategies with which you can put these guidelines into action:

Compare Multiple Rental Insurance Quotes

Before diving into the many short-term rental insurance options out there, it’s crucial to have a solid understanding of the landscape. Comparing plans from various providers can help you secure the best coverage at the most competitive rates.

At the same time, you must keep in mind that short-term rental insurance is a niche market. Standard home insurance policies generally don’t have the coverage property managers need. A homeowner’s policy, for instance, won’t account for intentional guest damage or guest liability, two of the major planks of renter’s insurance.

On that note, you need to get to know which carriers specialize in short-term rental insurance, how their policies are structured, and the average premiums they charge for properties like yours.

Put Safety First

It’s a moral obligation on the property manager’s part to focus on the security and safety of their guests. It’s also one of the most effective ways to reduce short-term rental insurance premiums.

Rental property managers are often required to install certain safety measures, such as smoke detectors, alarms, and fire extinguishers. Update your routine to check on these features often, adding easy-to-reach first-aid kits and fire blankets wherever you can.

Security is a major issue short-term rental property managers face, and insurers like to see robust standards in place that will keep guests safe. These include everyday items like visible deadbolt locks and security systems, though they also entail safety measures apart from the units themselves, such as adequate lighting in hallways and stairwells. Motion sensor lights around the perimeter can help as well.

An insurer will always respond in kind to a complete system for ensuring guest safety. The more effective it is, the better chance you’ll have for a lower premium.

Beef Up Guest Screening

Guest-screening is a cornerstone of rental property risk management. But there’s much more to the practice than simply checking IDs and charging security deposits. And on top of that, an effective guest screening protocol doesn’t just impress your insurer: Your guests will also appreciate it and be more likely to comply with the request.

Many short-term rental platforms, including Safely, offer guest-screening services in their insurance plans. They can verify IDs, gather references, and use public records to verify identifying information.

Rental property managers can also add a few touches to guest screening when communicating with potential visitors. Kindly ask a prospective tenant the purpose of their trip, how many are in their party, and how long they’ll be staying. Bigger groups, such as spring-breakers or wedding parties, may need stricter verification policies in place to account for the greater risk.

Communicate House Rules Clearly

Rental agreements must include expectations regarding tenant behavior in vacation rental properties. Take the time to ensure your guests understand house rules before settling in. Outline property features and amenities, parking policies, occupancy limits, the check-out process, and other factors regarding guest conduct.

Incorporate all of these house rules and policies in a well-drafted document, which you may require guests to review and sign. Insurers like to see an organized set of house rules that is strict but fair, and agents may be more inclined to offer discounts to rental property managers who follow guidelines to the letter.

Make Regular Inspections

Regular property inspections cover a lot of ground. They serve to make guests’ stays enjoyable, and they can also detect potential problems that could increase the property’s liability, preventing them before they happen.

Although some items may seem trivial, they’re still necessary to keep in compliance. A small faucet leak can result in hundreds of dollars in water damage, for instance. And an unfixed or shaky doorknob could become a similar safety hazard.

Short-term rental property managers can conduct regular inspections at any interval, although the more often, the better. Draw up a full checklist outlining every item to be inspected: wiring, plumbing, accessibility, appliances, furniture, bathroom fixtures, and so on. Anything that could affect the guest experience and your liability should be included. Share the checklist and inspection documents with your insurer to show you take this responsibility seriously.

Upgrade Furnishings and Appliances

Vacation rental managers often have to balance furniture quality with limited budgets. But there’s something to be said for durable, modern furnishings that you may have to spend a little more on, and not just customer appeal.

Wobbly tables, ripped-up couches, and chairs without adequate support are potential safety hazards. Cut-rate appliances are, as well. Malfunctioning refrigerators, leaky washing machines, outdated stoves and ovens, and even ancient coffee makers can unexpectedly result in liability claims in certain situations.

While it may be tempting to buy cheaper items from less-established companies, try to find modern pieces from reputable manufacturers. Higher-quality furnishings and appliances that are solidly built don’t just appeal to your guests. They last longer, function better, and can reduce the chance of accidents and hazards, all things that your insurer will notice.

Safely: Short-Term Property Managers’ Source for Affordable Insurance

Safely hopes this primer on how to reduce rental insurance costs has encouraged you to take the necessary safety measures. Vacation and short-term rental properties are the focus of our business. We’ve helped many in this growing industry limit their liability with tailor-made policies, and we’d like to do so for you, too. To find out more about our insurance and guest screening, contact our sales team online today.