Damage Protection can be an Important Component of Guest Retention

Most people naturally think that the primary purpose of damage protection is to cover the cost of repairs when a guest causes damage to the rental property.  It certainly does that, but its value is so much more.  

Having insurance in place eliminates potentially awkward conversations with your guest about damage; who caused it, what it costs and who going to pay for it.  With damage insurance, that conversation does not have to take place and the guest can depart having enjoyed their vacation experience and hopefully return in the future for another stay, helping to increase overall nights booked and revenue.

Consider the scenario where your cleaning staff calls to let you know that the guest broke an expensive lamp during their stay.  You’ve got to make the call to your guest to let them know that you need to retain some (or all) of their damage deposit to cover replacement of the broken lamp.  How many times have you heard the response “it was that way when we arrived, we didn’t break it.”  Perhaps it was one of the kids who didn’t say anything to the parents or maybe just a situation where the guest felt the cost of the stay was already expensive enough.  Regardless, you now have a situation where there is not going to be a winner, but instead everyone will lose.

With a protection plan in place, the claim process is easy … the lodging provider uploads a photo of the damage along with the receipt for repair and replacement and a check is sent to you for full reimbursement.  The guest benefits by transferring much of the risk to the insurance company as they pay a small damage waiver fee at the time of reservation. As the lodging provider, you didn’t have to have that conversation to let them know that their vacation is going to cost a little more than what was anticipated & budgeted. 

Fortunately, you put insurance in place with each reservation.  The guests in the above scenario departed happy and will be back again for another stay down the road!  Damage protection is like any insurance … it transfers financial risk to the insurance underwriter.  It’s not always needed but when accidents happen (and they will), everyone is happy the insurance is there.

Protection Brands provides damage protection underwritten by TERN Financial and administered by Rental Guardian.  Coverage can be purchased online at www.damageprotection.insure.  Lodging providers are encouraged to register as a Protection Brands partner at www.getdamageprotection.com and enjoy special pricing discounts.

Airline Shutdown Catches Travelers Off Guard

 Travel insurance protects against financial loss for the unexpected.  It's doubtful that these travelers expected that their airline would go out of business!

The Cypriot airline Cobalt Air has cancelled all its flights effective October 17, 2018 and indefinitely suspended operations, advising customers not to go to the airport.  Cobalt, which had taken passengers to and from Cyprus since 2016, flew to 23 destinations and operated flights at Heathrow, Stansted, Gatwick and Manchester.

“Top tips: get travel insurance, book flights with a credit card and find a partner who can make you laugh despite waking up to the news you’ve both lost hundreds of pounds” said reporter Aamna Mohdin who waas among those affected by the cancellations.  Read the full story at The Guardian.

Photograph credits: Matthieu Clavel/AFP/Getty Images

Wild Fires are Impacting Travel Plans

Many areas of the western US are currently being ravaged by record-setting wildfires for the second year in a row. According to the US Forest Service, there are currently 68 ‘large incident’ fires burning in the US as of this date, most all of them in the Western United States.

These fires can cause havoc for vacationers whose travel plans are disrupted either due to the inability to get to their destination or in some cases, due to the travelers primary homes being impacted by fire.

For those with travel insurance, most can rest easy as their financial risk is protected against natural disasters.  Play Travel coverage underwritten by Nationwide Insurance Company will provide reimbursement for non-refundable travel expenses in the event that the vacation destination or the traveler’s primary home is inhabitable due to fire.  It also provides coverage for instances of evacuation due to fire threat or roads closed that prevent someone from getting to their destination.  For others, they may be one of the thousands who have been called on to battle the blaze and their vacation plans, regardless of the destination, have been put on hold due to the job requirement. They too have coverage.  Some exception and restrictions may apply, so please refer to coverage documents for specific terms.

Travel insurance is designed to protect against the unexpected.  It’s a small price to protect yourself against financial risk from unexpected events.  The key is to make it part of your travel plans at the time of booking.  Once a fire has started and threatens your plans it’s too late.  Similar to a named storm, insurance coverage may not cover you if purchased after a fire is declared or you are within 30 days of the start of your travel.  Plan ahead and be protected.

Top 10 Reasons Vacation Rental Owners Prefer Damage Protection vs. Damage Deposits

For most vacation homeowners and managers, the days of collecting damage deposits for a rental stay are gone.  Here’s a quick list of 10 reasons why so many lodging providers prefer damage protection:

1. Simplified Process: collecting and returning damage deposits are a hassle! You must collect the funds, deposit them, inspect for damage and then return at the end of rental assuming no guest damage. It's an involved process.
2. No Need for a Separate Escrow Account: If you are collecting damage deposits, you really need to have a separate escrow account to which you can deposit the funds.  This money belongs to the guest and not you and therefore should not be commingled with your operating funds.  Escrow accounts are really just temporary holding accounts you set up with the bank.
3. Damage Protection Benefits Both the Lodging Provider and Guest: Letting a guest know that you are charging them for damage rarely sits well with the guest.  Damage protection is meant to cover both the guest and the lodging provider whereby in the event of accidental damage, both parties are happy that the insurance is in place.
4. Guests Prefer Damage Protection: Guest surveys have shown that guests prefer to pay a reasonable fee for damage protection rather than tying up their money for long periods of time as a deposit against accidental damage. The number is big; 75% according to HomeAway.
5. Returning Guests:  Happy guests are likely to return for another stay.  End the stay on the topic of paying for damage, they are likely to find another accommodation next time.
6. You Determine the Guest Fee: Most lodging providers elect to pass the cost of the damage protection policy along to the guest as a ‘accidental damage protection’ fee with each reservation. You determine if that is at the retail cost or some other amount.
7. Eliminates the Bad Guest Review:  Take money out of the pocket of a guest and you open yourself up for a bad review.  It’s the guest’s way of ‘getting even’.
8. Holding a Credit Card is not ideal: Credit card chargebacks are common when lodging providers attempt to use them to pay for damage.  The credit card company will typically side with their customer when a dispute arises.  If you hold a credit card there is a good chance you will be left holding the cost for repairs.
9. Hassle Free Claims Process:  In the event of damage, you complete an online form, upload a photo of the damage and copy of the receipt for repairs or replacement.  Claims are paid in 30 days or less.
10. Damage Protection is Available Online:  The process is quick and easy when purchased from Protection Brands, a RentalGuardian.com company.  Just visit www.getdamageprotection.com and register.  Once registered its easy to purchase a policy.  The website is designed to allow you to save your property and credit card information, if desired for even faster visits for future purchases.

If you are among those who are still managing damage deposits, you may want to consider the benefits of implementing a damage protection plan.

AAA reports Travel Insurance sales up 20%

AAA says its travel insurance sales have increased more than 20% this year, following a 13% rise in 2017.

"Travelers are increasingly not taking chances, and they're choosing to invest in the value and peace of mind that travel insurance can provide, for international as well as domestic and cruise vacations," said Bill Sutherland, senior vice president of AAA Travel and Publishing.

A recent AAA survey revealed that 38% of travelers are likely to purchase insurance for future international trips. The most valuable benefit to consumers is trip-cancellation protection.

Seventy percent said the cost of their trip is the leading factor for deciding whether to purchase insurance. Other considerations are personal or family health concerns (69%), how far into the future the trip is booked (61%) and recommendations from friends or family to purchase insurance (57%).For those travelers, trip cancellation protection is the most valuable benefit with 9 in 10 (88 percent) of those likely to purchase insurance saying that getting their money back, if they cancel a trip, is their top priority.

“There are just too many unknowns, like family emergencies and natural disasters, which can throw an unexpected wrench into a planned vacation. Travelers are increasingly not taking chances and they’re choosing to invest in the value and peace of mind that travel insurance can provide, for international as well as domestic and cruise vacations.” said Robert Sinclair, Manager of Media Relations for AAA Northeast.

For its survey, AAA conducted a telephone survey of landlines and cell phones in June. In total, 1,003 adults in the continental United States were surveyed.

Travel Insurance - Good Idea or Not?

Insurance is a means of protection against financial loss.  It is a form of risk management, primarily used to hedge against the risk of a potential or certain loss.  When you purchase insurance, you ‘transfer the risk’ because the insurer is taking the risk of the loss in exchange for a premium payment, which is typically a fraction of the loss amount.

Not always is insurance a necessity in travel.  The numbers show that stuff happens and you’ve got somewhere around a 20% chance of an event happening that could interrupt your travel plans or even cause you to cancel your trip.  Plans vary but typical covered events range from sickness, weather, death, accidents, flight delays and the like.  Additionally, insurance will provide other benefits like medical payments and emergency medical evacuations which can be very costly.

With only a 20% chance of something happening, that means 80% of the time you probably won’t require coverage.  But isn’t that the case with all insurance?  When you purchase homeowners insurance, you pray that your home won’t catch fire (odds are with you) or someone will get injured,  but it’s good to have the peace of mind knowing that if something happens, your insurance has you covered.

It’s no different with travel insurance.  If you are comfortable with the financial risk, then travel insurance may not be for you.  Your risk likely includes the out of pocket cost of lodging accommodations, flights and maybe some event reservations, all of which are typically non-refundable.  On the medical side, travel policies provide coverage up to $25,000 for medical expenses and up to $250,000 for emergency evacuation.

The cost for insurance is seven percent of the coverage amount.  So for $70, you can insure a $1,000 trip.  It's a relatively small price to pay as you don’t know when there will be an event that puts a crimp in your plans.  Often that event is something related to another family member who may not even be in your traveling party.

The bottom line is to assess your tolerance for risk and make a choice at the time of booking your travel.  Once something happens, it’s too late for travel insurance.

Protection Brands offers Travel Insurance in partnership with Rental Guardians InsureStays, underwritten by Nationwide Insurance Co.  Policies can be purchased on the web at www.travelprotection.insure.

Stuff Happens! Damage Protection results in $800 savings.

Broken glass cooktop

Accidents happen and when they do they can be expensive.  As a property manager, I got a call one day from a guest that they had dropped a skillet onto the cooktop resulting in broken glass! 
Fortunately, we insure all of our reservations with damage protection from Rental Guardian.  A call to the appliance repair folks and a new glass top was installed.  Reimbursement was easy as all had to do was initiate a claim online, uploaded a photo of the damage to their system, along with a copy of the repair bill and a check was received for the full amount of the $850 repair.

Damage isn’t always as simple as a couple of broken wine glasses or a towel bar torn from the wall.  Sometimes repairs can really add up.  This event turned out to be much better than it could have been as both the guest and property manager benefited from the implementation of our use of damage waivers in lieu of collecting and managing damage deposits.  We all left on good terms and my expectation is that we will see this guest again in the future in one of our properties.

If you are a vacation homeowner or property manager and would like to learn more about damage protection, visit www.getdamageprotection.com.