Insurance

Last update: 08/2018

Through our 14 years’ of experience and after processing thousands of rentals through our luxury portfolio, we know and understand the requirements of insuring short term rental property.


The problem:

  • Owners are concerned that guests will not respect the property, and through misuse or negligence, will break their belongings and damage the interiors.
  • Guests are reluctant to hand over credit card details upon arrival for Nox Rentals to take a credit card authorisation (in a similar manner to car rentals.)
  • Sometimes the credit cards we’re given don’t have any funds available.
  • Upon departure, we conduct an inspection and we find that there are damages. We proceed to charge the card or recoup the repair / replacement costs from the guests, who dispute the claim and either initiate a “charge back” through their bank or threaten to go onto Tripadvisor / Hello Peter / Facebook etc with defamatory comments on both Nox Rentals and the property.
  • Owners then arrive at their property and are unsatisfied with the general upkeep and management of damages issues.

The background:

  • Whilst we try our best to screen every guest on arrival, sometimes guests do not behave as we would all like them to. We are extremely responsive to any breakages and damages, and each incident is tracked and logged.
  • Unfortunately, after guests have spent thousands of Rand to stay in a property, it leaves a very bitter taste trying to charge the guests for a few thousand Rand for deep cleaning a carpet etc. The entire guest experience is ruined, and this can turn a 5 star online review into a detractive comment.
  • Of importance is that the banks no longer support a “manual authorisation” due to so much fraud happening through this means. The requirement is therefore for us to physically charge a credit card for a damages deposit, and to then credit it back once the guests have departed and all is in order. The issues around this are:
    • Credit card merchant fees of 2.4% for each charge
    • Currency risk / guests being credited back different amounts due to fluctuations in exchange rates.

The solution:

  • BnBSure, an insurance designed specifically for short term letting.
  • Nox Rentals have group cover in place, and it is very straightforward to add a co-insured homeowner to our policy. Cover can be effective within 30 minutes.
  • Nox Rentals, as a condition of contract, require the following minimum requirements:
    • R50m public liability cover
    • Contents cover, to a level commensurate with your replacement value
    • R20,000 accidental guest damages cover. An additional R20,000 cover can be purchased for R59.17 per month.
  • There are a number of add-ons which can be discussed with our broker (details below), including cover for the building:
    • Fitted carpets, blinds, kitchen counters and cupboards, and all other fixtures and fittings are deemed to be part of the building. Accidental damage to these will only be covered if the building is insured on the policy.
  • More info can be found here.

The benefits:

  • Peace of mind whilst you physically aren’t present to oversee the care of your property
  • Automatic cover for revenue loss due to unforeseen construction activity
  • A 20% discount due to Nox Rentals having “group cover” in place (we do not mark up the premium)
  • Owners can also include building cover, and have all of their cover in one place.
  • If owners already have a broker / insurance provider in place, you’re welcome to purchase the BnBSure policy through any other appointed representative.

The small print:

  • Nox Rentals will charge the owner’s statement on a monthly basis for the monthly premium.
  • Nox Rentals will not cover any guest damages, repairs or replacements to owners property. This includes the replenishment of kitchen inventory. Owners should expect a fair allowance for replacement of crockery, cutlery and glassware throughout the year.
  • Nox Rentals will manage the entire claim process on behalf of our owners at no additional charge.
  • We require the following to initiate the cover:
    • Details of the legal entity that owns the property; either:
      • Personal capacity
      • Company (Pty) Ltd
      • Trust
    • Value of items to be insured
      • New replacement value of contents
      • Rebuilding cost of the building (if applicable)
  • Please discuss any queries with your PRO.

bnbsure                                      Incompass