Hi Moshe-
It sounds like you have a client who is a property manager, who manages vacation rental properties? And your client wants to offer his clients (property owners) a product that they can purchase to cover accidental damage during the rental period? And maybe his clients would pass the cost onto the traveler, or the owner would simply pay for it.
You have a lot going on here and I think I can help clear it up for you and your client.
Travel Insurance: There are some travel insurance companies who have targeted the short-term rental market. They now offer "accidental damage" coverage. So if the guest accidentally damaged something, then it would pay. You will typically see limits of $1,000, or $2,500. It would essentially take the place of a "rental deposit". Usually the property manager would put the cost on to the traveler. So, you can rent this home for $1,000 for the week, but you must pay the $79 damage protection insurance fee, etc.
Here are the top players for this: And they will usually just integrate with your clients booking platform.
http://csainsuranceservices.com/vrma/
http://redskyinsurance.com/security-deposit-waiver.html
The hot issue in this market now is liability insurance. Particularly, whether or not short-term renting is a business transaction or not and personal liability does not cut it, owners need and want commercial general liability. In fact, many communities are starting to require it.
So in the last year, we have seen a few companies come up with a liability insurance product that is supplemental (like travel/damage), but includes the $1M of CGL and some damage coverage as well, $10,000.
Here are some players on this:
https://www.comethome.com/
http://www.peers.org/product/homesharing-liability-insurance/
Your owner could offer this to his clients, but is it necessary?
I'm a Principal at Proper Insurance and we sell an insurance product designed for short-term rentals, and it replaces the owners current coverage, except it's a business policy. It has coverage for building, contents, income, and liability. Browse our website, www.proper.insure.
We work with and appoint brokers in all 50 states.
Here is what you need to ask your client and tell your client to educate his owners.
#1-The owners of the homes or condos already carry insurance, and a standard deductible is $1,000, so that policy should respond to anything, including damage from a guest, or theft from a guest. So the only thing the owner should be concerned about is the $1,000 deductible. This is where the security deposit, or supplemental damage protection comes in.
Your client manages the homes of people. What he needs to do is ask his owners and make sure his owners carry the correct primary coverage, and then they are good. And to take it a step further, he should request a cert for liability, to make certain they are covered.
The owners have two questions they need to ask their carriers:
#1: If I rent my property out on a short-term basis and a renter burns my property down, will this policy respond and rebuild my property?
#2: If I rent my property out on a short-term basis and a renter is injured while staying and sues me for bodily injury, will this policy respond and cover me?
This short-term vacation rental market is getting very sticky and I have seen carriers deny coverage on an HO and even a DP form, because the carrier says, we did not know you were doing this regularly, you are basically a hotel. And you have a professional property manager!
Do your research and spend some time on my site. Read our FAQ's. Read our Property Manager page, and blog posts. You can quickly become an expert in this area and be a resource to your clients. And of course reach out to Proper if you have a need to sell our product.
[email protected], 888-631-6680.