Navigating the world of guest screening and insurance

Andrew Bate, CEO of Safely.com, discusses how to navigate the complex world of guest screening and insurance in the wake of the pandemic.

• Please introduce yourself, your company and the services you provide in the short-term rental industry.

I’m the co-founder and CEO of Safely.com, the leading insurtech and guest screening solution for the vacation and short-term rental market. I previously served as a founding advisor to Rented.com and TravelPerk, and co-founded HotelUpgrade to help hoteliers identify and attract high margin business travel through guest perks and upgrades.

Safely.com helps property managers recruit and retain their homeowners by rigorously protecting their property through tailored commercial home insurance, travel insurance, and effective guest screening. By addressing the two principal homeowner concerns — ‘who is staying in my house?’ and ‘what happens if something goes wrong?’ — we provide homeowners with the peace of mind to enter the attractive short-term rental market.

Since launching in 2015, over $50 billion of homeowner liability has been covered by Safely.com.

• How has the pandemic affected your business? What are the biggest challenges and opportunities you are currently facing?

2020 was a challenging year for us all, on many fronts. The global travel industry was hit hard — with travel halting almost overnight as the pandemic took hold. We had to cut costs wherever possible, as many companies did, and were able to weather the storm. During this time, we focused on our customers to help them where possible. We were also able to look internally and

review our processes and products, which was of great benefit once the travel bans were lifted.

Your readers will be well aware of the fact that the short-term rental industry is enjoying a boom in light of the huge demand for domestic travel this year. This presents both an opportunity and challenge for us as a business. The opportunity is perhaps obvious: short-term rentals have become the accommodation option of choice — why not relocate to a safe, comfortable, home

from home in a beautiful location for a few weeks if you’re able to work and school remotely?

This presents financial impetus for homeowners to access the increasingly lucrative short-term rental property market. The challenge is around barriers to homeowner acquisition and fulfilling the traveller demand. There are an estimated 30 million second homes across the US and Europe that are only occupied four to six weeks per year. These are properties that have never even seen a listing on Airbnb, Vrbo or Booking.

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Fear around the idea of letting an ‘internet’ stranger into your home remains the number one obstacle for second homeowners to rent out their property. And this is where our Safely.com insurtech solution can help.

• Why is guest screening becoming such an integral part of short-term rental property management?

A large proportion of short-term rental properties are family owned. They’re special, holding lifelong memories and emotional connections. Even those properties that don’t have a personal connection greatly benefit from tailored insurance.

As mentioned, the main barrier for second homeowners to rent out their properties is worry around letting an ‘internet’ stranger into their property to sleep in their bed. Property managers can ease these concerns through effective guest screening to stop the ‘bad guests’ before they get through the door — identifying sex offenders, criminals, and the small, but damaging number of guests who have already destroyed other homes. Powered by analytics, comprehensive guest screening solutions effectively turn internet strangers into trusted guests. The end result: a happy reassured homeowner.

The property manager/ owner relationship is built on trust. Property managers need to be able to protect the property assets of the owner. Guest screening, together with insurance, is the way to earn trust and strengthen owner relations.

• Guest screening is highly nuanced. How can property managers ensure they’re getting the right balance between ensuring safety and avoiding discrimination?

It’s imperative that guest screening is powered by real data analytics. By this, I mean screening backed by technology and data and not based on gut instinct and social media ‘sleuthing’.

Relying on internet searches, phone and email correspondence can lead the property manager to be subjective and judge a guest by the posts they make, how they look, how they sound or how they write. Data-driven screening removes subjective factors, making the process objective. The need for human decision-making is removed.

• Accessing specialist insurance can be a pain point for property managers. What tips do you have for navigating this complex field?

Obviously, nobody wants to approach life with the worst case scenario front of mind. But, unfortunately, things do go wrong occasionally and it’s better to be safe than sorry. Particularly when it comes to insuring against damage to your short-term rental property.

It is a complex field. For example, we know that many owners rely on Airbnb’s $1,000,000 Host Guarantee. This may sound great, but it is called a ‘Guarantee’ instead of your personal insurance policy for a reason. Other OTAs may have some level of coverage, but it can be inconsistent.

Guests are sometimes given the opportunity to purchase damage insurance when they book a rental, but it is the decision of the guest, not the property manager, so it leaves gaps in coverage.

We suggest having the following in place:

● $1,000,000 of commercial insurance that covers damage to the home’s structure, its contents, and bodily injury [covering accidents and non-accidents and eliminating damage deposit administration]

● Guest screening to identify sex offenders, felons, terrorists, and bad guests who have already destroyed other homes

● Trip protection and cancellation insurance

Top tip: Always check the fine print — before you discover the damage, especially the exclusions.

• What are the benefits of using specialist, tailored insurance?

A specialist, tailored insurance product that covers accidental damage gives peace of mind for the unlikely, but possible, event that things go wrong — because occasionally they do.

At Safely.com, we’ve found that problems occurring in a short-term rental are not as prevalent as most people think. Only three per cent of reservations result in a claim. A third of these claims are pure accidents, another third involve silly mistakes, what we refer to as being a result of ‘vacation brain’, whilst only one per cent of reservations involve intentional damage to a property.

But when disaster strikes, having the right tools in place to deliver coverage for losses is essential for a property manager wanting to ensure owner satisfaction. Robust damage liability insurance for home, contents and bodily injury removes friction between homeowner, staff and guest.

Property managers promoting comprehensive vacation rental insurance are more likely to recruit new homeowners and increase their revenue as a result. We’re pleased to say that managers using Safely’s insurtech solution report business growth of over 30 per cent.

• You must have heard some insurance claim horror stories in your time. Are you able to share any highlights with us?

Where to start?! There was a party at the house and one of the guests decided to ski off the roof. In doing so, they hit and disconnected a power line and blew out the power to four homes in the neighbourhood. Amazingly, the guest was not injured.

While vacationing at a home in the California Mountains, a guest failed to lock a bear guard, which, as it implies, prevents bears from entering the property. Well, a bear wandered onto the property and subsequently the home, where the bear helped himself to food in the fridge. While the bear did not sleep in any beds, he did damage some furniture. Fortunately, the bear left before the guest returned.

• What’s next for Safely.com in terms of focus and expansion over the coming year and beyond?

With the anticipated growth in direct bookings, we’re focused on helping property managers use guest screening and insurance to recruit homeowners and protect bookings. Over the last year or so, OTAs have changed their cancellation policies and increased their fees. This has resulted in property managers wanting to reduce their dependence on OTAs and shift bookings to their direct website. While the OTAs may provide some level of protection, the property managers have no protection for direct bookings. This is where Safely.com’s specialist, tailored insurance offer will help.

Above all, we remain committed to providing peace of mind to homeowners and property managers alike through the best-in-class risk mitigation. The unprecedented demand for vacation rentals that we’re currently seeing on a global scale presents property managers with an opportunity to convince homeowners to list their homes and to do so with them. By addressing the homeowners questions of “who is staying in the home?” and “what happens when something goes wrong?”, we will help property managers grow their business, expanding our own reach as we do so, both in the US and internationally.

Andrew Bate is co-founder and CEO of Safely.com, the leading insurtech and guest screening solution for the vacation and short-term rental market. Since its launch in 2015 over $50 billion of homeowner liability has been covered. https://safely.com/

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