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Do vacation rentals need special insurance coverage?
As a short-term rental owner, is there insurance when a guest damages your home? Does your personal homeowner's insurance cover damages? A great way to generate some extra income is by owning a second home in a resort town and renting it out for additional income. This is a great way to put a little extra cash in your pocket. However, when something goes wrong for your renters, this can cause major stress for homeowners. If a toilet overflows causing flooding or heaven forbid, your renters cause damage to your property it can be a logistical nightmare for the homeowner. What is the second homeowner to do? Does your personal homeowner's insurance cover these damages? Should you go through your rental websites such as Airbnb or VRBO? These issues can cause a lot of stress for landlords. Many times second homeowners may live far away or even in a different state. Welcome to the what if's of managing a home through the online vacation rental marketplace. When renting out a cabin, you do have insurance options. So many families buy second homes in ski towns like Big Bear Lake, California with the hope of renting them out. Popular online vacation rental companies like Airbnb can make the rental process easy. It may sound like a simple way to produce some extra income. When purchasing that ski cabin amidst the pines of the San Bernardino Mountains many homeowners don't think about what kind of insurance do you need for your short-term rental property? Many second homeowners may not even be aware that companies like Airbnb and HomeAway offer their own insurance policies. Airbnb's Host Protection is here to help I decided to rent out my home through Airbnb a few years back. After months of successfully profiting off of my vacant second home, I had no idea what to do when a guest purposely damaged my home. Should I use my personal homeowner's insurance? Should I contact Airbnb and open a claim? My mountain retreat under the tall Jeffrey Pines near Big Bear Lake was my serene cabin to escape to. I decided to rent it out to skiers and travelers for some extra income one ski season. After my renter moved out, I discovered my furniture was vandalized. My carpet was destroyed and the whole cabin (A non-smoking property) reeked of cigarettes. It was thousands of dollars worth of damage. I was so shocked (and pleased) when I called my rental agency, Airbnb, to hear about their host protection policy. Short-term rental insurance plans to the rescue Your second home is your sanctuary. What do you do when a guest damages your property? When listing a home you have purchased for rental through companies like Airbnb their host protection program takes all the guesswork out of what to do if you have to make an insurance claim. This program acts as primary insurance and provides liability coverage to hosts and if applicable also to their landlords. When my property was vandalized by a renter, this insurance policy came to my rescue. It's always a good idea to let your personal insurance carrier know about rental activity in any space you own. This means whether you are renting out a spare room or that vacant motorhome sitting in your driveway. An insurance policy like Airbnb's host protection policy automatically applies to every Airbnb reservation. On the off chance, you do need to process a claim, they can be filed directly through Airbnb. Online vacation rental marketplace offers more insurance than you would expect VRBO or HomeAway is another popular way to rent out that mountain cabin you own, just sitting vacant. HomeAway offers a $1,000,000 liability insurance plan. This provides owners and property managers with plenty of liability protection for all those trips booked through the HomeAway checkout. If something goes wrong with your renter experience, and trust me, it could, this gives you $1,000,000 in primary liability coverage. That is at no additional cost to you. This could be a lifesaver for you and your property if you don't already have a liability policy. Airbnb's Host Guarantee and Host Protection Insurance are included for every booking. This covers up to $1,000,000 under each program. If you have a short-term rental property and have any issues pop up there is no worry. You just need to contact Airbnb support about their insurance protection program. Their global support is available twenty-four-seven in eleven different languages. Insurance protection is even offered for experience/adventure hosts like me! If a hiker takes a fall on one of my scenic hikes, it's good to know Airbnb's Experience Protection Policy has my back! Short-term vacation rental companies may offer better insurance protection than you would suspect. I work as a local hiking guide in Big Bear Lake California. I had no idea that if a guest takes a fall or rolls an ankle on one of my scenic guided hikes, Airbnb actually has Experience Protection Insurance. Heaven forbid if a guest hiker gets hurt this helps my guests get the help they need. This removes the stress off my back, as the hiking guide. Not only that but as the host, if I get hurt while taking guests on any of my experiences from my snowshoeing tour to my snow play adventure, Airbnb insurance policies will be there to help. As a rental homeowner and as an Airbnb experience host, it's great to know that there is actually insurance in place to help me out, if I or my guests have bodily injuries during an experience . I love the fact that these vacation rentals by owner companies help out homeowners by providing additional insurance coverage. That way if something were to go wrong with your short-term rental property from legal responsibilities to guest's property or belongings damaged to an injury during an experience, the homeowner has less stress to worry about. This article was contributed by Amber Woodyard, Big Bear’s hiking, adventure, AirBnB experience expert and nature guide. For more info and contact information please visit Amber's website/blog http://hungrymountaineer.com/ ....

14 TIPS FOR SELLING IN A HARD MARKET
Historically, a hard market is part of the cyclical nature of the insurance industry. At one time, these cycles occurred fairly consistently at about seven year intervals. However, the last significant hard market came in the mid-80s. A hard market is characterized by increasing rates and/or reduced industry capacity, which leads to affordability and/or availability problems. In addition, both underwriting and claims adjusting usually become more stringent. In the current marketplace, these conditions are exacerbated by increased uncertainty about such loss exposures as terrorism, mold, etc., and by a reinsurance market significantly strained by the events of September 11. Looking specifically at the E&O marketplace, we can expect increasing rates/premiums and more stringent underwriting. This presents problems and opportunities. The bad news is that competition could lead to lost accounts. The good news is that competition could lead to lost accounts — because it’s probably not desirable to retain all your existing accounts. There’s more potentially good news: since many carriers are in the same boat, the hard market could lead to new business — and increased premiums mean higher commissions (until or unless carriers start reducing them again). You can use this increased revenue to improve and expand services in a way that differentiates you from the competition. Let’s take a look at 14 tips you can use to improve your sales performance during the hard market (or, for that matter, any market): Sales Tip #1: Know your buyer Whether you’re selling BOPs or Tupperware, you can only sell three things: (1) price, (2) product, and (3) relationship. When it comes to insurance, about 50% of customers are relationship buyers, 25% are price buyers, and 25% buy on the basis of product (10%) or value (15%). If you know where your prospect/insured falls along this spectrum, you can tailor your proposal to them. Sales Tip #2: Really know your buyer Develop a client profile/rating sheet that includes everything you know about the buyer down to their favorite TV show. Identify the real decision makers. You can’t sell insurance if you’re going through a gatekeeper. Learn all you can about the buyer. Talk to employees, business associates and others to learn what makes this person "tick." Stay in frequent contact. Communicate with VIP, at-risk, and high-potential customers frequently. Very few of these contacts should be insurance related. Pay attention to the details. Joe Girard, listed by the Guinness Book of World Records as the best car salesman in the world, said his secret was sending birthday, holiday, and other greeting cards. Throughout the year, keep in contact and do little things for clients (such as sending a magazinearticle on a subject that interests them). Then, shortly before renewal time, do something really memorable that’s unrelated to their insurance. Sales Tip #3: Don’t give up According to Guerilla Prospecting, many contacts with fewer customers are far more effective than fewer contacts with many customers: 1 sales contact = 2% of sales closed 2 sales contacts = 3% of sales closed 3 sales contacts = 4% of sales closed 4 sales contacts = 10% of sales closed 5 sales contacts = 81% of sales closed Sales Tip #4: Don’t ever give up According to the Darnell Corporation, 20% of salespeople make 80% of sales. More than 50% of all of Avon’s sales come from 17% of their sales reps — who produce 10 times the revenue of the other 83%. The reason: most salespeople quit after one or two initial contacts: 48% quit after the first contact 25% quit after the second contact 12% quit after the third contact 5% quit after the fourth contact 10% quit after the fifth contact As you can see from the Guerilla Prospecting statistics, 80% of sales require at least five contacts. Sales Tip #5: Don’t recognize "no" The following statements all mean "No." However, don’t take "No" for an answer. It might take four or five "Nos" until you get a "Yes." "I’ll think it over." "We’ll discuss it and let you know." "I’m just looking at all my options." "The price is just too high." "I’ll have to get back to you." "Let me see how this fits our budget." (Source: "Six Rules of Salesmanship to Clinch the Deal," HOC, August 1995) Sales Tip #6: Use solution-oriented selling If I said I could come into your agency or company and show you how to close more than 90% of your sales leads, increase your retention rate to 99.9%, and more than double your book of business in less than a year, would you hire me as a sales consultant? You would? That’s odd, because I haven’t mentioned price! When you offer solutions — to create opportunities, solve problems, reduce risk, etc. — price is the last thing that will come up during the negotiations. Let’s face it. In the minds of the prospects, most insurance is sold using similar approaches, similar coverages, similar proposals, claims, promises, etc. Because prospects perceive all of these elements as equal, price becomes the only variable — which means you need to define the "unique selling proposition" that differentiates you from the competition. Consider offering a package of solutions unlike anything your competitors offer. For example, provide free or discounted in-house seminars, loss control services, or other perks. Remember, increased commissions might allow you to offer these benefits at little or no cost. Sales Tip #7: Offer painless selling In a hardening market, accounts experiencing problems with their current insurance program are your best prospects — because you can relieve their pain. If the person is a "product buyer," you can also create pain by showing coverage gaps compared with your product. Be sure to use vivid examples. Demonstrate how your proposal will boost their bottom line by reducing risk. Sales Tip #8: Strengthen relationship selling I’ve had my Personal Lines account with the same agency for 29 years. They don’t offer the best products and I can get far better prices elsewhere. It’s our relationship that keeps me doing business with them. My mother worked for this agency for a number of years until she became terminally ill and passed away more than two decades ago. During her final year, she was only able to work for a few weeks. At best, one could expect a decent insurance package to provide 60% pay under a salary continuance or LTD program. However, the agency owner continued to issue her full paycheck every two weeks whether she was able to work or not. When the call came from the hospital that she had only hours to live, I raced there at 2:00 a.m., just before she passed away. At 3:00 a.m., the agency owner and his wife showed up at the hospital to offer any help they could. I’ve never forgotten what they did for my family and, for that reason, I’ve never considered moving my account to save a few bucks. Relationships build loyalty. Strong relationships based on genuine interest, empathy, and compassion create fierce, almost fanatical, loyalty. If you treat your customers like family and go beyond the call of duty when needed, no coverage perks or pricing discounts can approach the effectiveness of such relationships. Sales Tip #9: Use testimonials Include testimonials of long-term clients in your marketing materials. Every time you’re involved in a claim "victory" for an insured, ask for a testimonial. Every time you exceed the service expectations of a customer, seek a testimonial. If possible, target these statements so that recipients of your materials know the claimants. Flaunt the fact that so-and-so chose your agency or company rather than a competitor. If needed, ask a respected client to make a personal visit to a customer on the fence. Prospects will appreciate your personal interest and value the opinions of a peer. Sales Tip #10: Utilize multiple closes An effective sales training program can teach dozens of proven techniques that you can use to close the account. For example: Direct close. Simply ask for the check. Time-driven close. "Because rates are going up next week, buy now" Relationship close. If applicable, this is a foolproof method. Deal/concession close. If the prospect balks, up the ante by adding such benefits as discounted seminars or loss control services. Sales Tip #11: Provide world class service Offer consistent, personalized, responsive, reliable, accurate, and professional customer service. Do the unexpected to dazzle customers with your commitment to service excellence. Sales Tip #12: Overcome objections Entire books and seminars have been devoted to this subject. Some objections are real and must be addressed, while others mask hidden agendas. Objections aren’t bad, in and of themselves. According to Learning International, a salesperson is 20% more likely to close a sale that includes objections than if the prospect raised none at all. To minimize objections, sell the benefits, not the product. Focus on emotional (e.g., security/risk) concerns. Stress why the prospect should buy, rather than their objections. Anticipate and be prepared for objections. Avoid bringing up those that the prospect wouldn’t have raised. Don’t talk price until you’ve demonstrated the superiority of your proposal — and never make excuses! The Alcoholics Anonymous Prayer says, "Lord, give me the courage to change the things I can change, the serenity to accept those that I can’t change, and the wisdom to know the difference." This prayer applies to three major types of objections: Sincere objections. Negotiate around these. Hopeless objections. You have to know when to hold ‘em, and when to fold ‘em. "Smokescreen" objections that have nothing to do with the product, but mask a hidden agenda. Fix the problem, and you’ve made the sale. Bear in mind that you’ll often be selling to a salesperson who might well know all the canned sales tactics. Sales Tip #13: Counter price If you’re selling relationship-based solutions and the product has been fairly priced, the premium should rarely be an issue. However, if your prospect asks for a lower quote and you have to address it, use these "last resort" responses: "It’s only that much cheaper?!" Imply that the competition’s product or service offers even lower value. Minimize the cost differential. Put the price difference in daily terms and, by compare it with something tangible: "That’s like giving up a (pack of cigarettes, couple of doughnuts, and so forth) a day." Make a "premium sandwich." "You get this for $, and this for $, and this for $, and this for $ ...." Constantly repeat the premium difference after you spell out each of the superior benefits your product provides. Use The Ben Franklin approach. "When confronted with two courses of action, I jot down on a piece of paper all the arguments in favor of each one — then on the opposite side, I write down the arguments against each one. Then, by weighing the arguments pro and con and canceling them out, one against the other, I take the course indicated by what remains." Make sure that the "pros" of your product outweigh those of the competition. Sales Tip #14: Try the Saturn Approach Don’t undermine product, service, and relationships by cutting price. Underwrite and price the account accurately using appropriate debits and credits, then stick with it. This will build credibility in the eyes of your client. Too often, we don’t think of margins or profits when we discount premiums. Assuming that a product has been accurately priced to generate a profit, if the product costs $1,000 includes a 20% gross profit ($200), and the customer is given a 10% ($100) credit/discount, that represents a 50% decrease in margin! As an alternative to discounting, add value by stressing your product’s superiority or unique benefits. You might also offer premiums by including free or discounted products or services. Create an entire package of value-added services as part of your overall marketing plan — you do have a hard market sales plan, don’t you?...