Updated on March 28, 2023
Sponsored by Proper Insurance and Waivo
About one year ago, Rent Responsibly Founding Partner Proper Insurance launched a sister company, Waivo, to offer vacation rental damage protection insurance. Darren Pettyjohn, co-founder of both Proper Insurance and Waivo, sat down for a Q&A.
How is Waivo different from Proper Insurance?
Darren: Proper Insurance is home insurance – think of State Farm, Allstate, and Nationwide. Short-term rental property owners carry home insurance for their properties. Home insurance covers the structure from perils such as fire, wind, or water damage; the personal property inside the property such as furniture or electronics; lost rental income as the result of a peril; and liability. Home lenders and banks require property owners to carry home insurance if there is a loan on the property. Proper Insurance is comprehensive home insurance tailored for short-term rentals.
Waivo replaces the traditional security deposit or the current damage protection plan on the short-term rental property(s) that is charged to guests to cover the damages they are responsible for. Its max benefit is $10,000, so it’s completely different.
Why would property owners and managers prefer Waivo over a traditional security deposit?
Darren:
- Security deposits are a barrier to entry for guests as many are against them. They do not know nor trust the person or company administering the deposit. You’d be amazed how anti-security deposit the modern traveler is.
- Security deposit management requires a process to collect the deposit and then refund it. What’s your time worth?
- Security deposits create an uncomfortable situation for everyone when damage to the rental occurs. It can ultimately lead to negative reviews, and again, is time consuming.
- Security deposits are not designed to be a revenue source for owners, operators, and managers.
- Protection can be limited depending on the security deposit contract language.
How is Waivo different from other companies that offer this damage protection up to $10,000?
Darren: Proper is successful because we solved a problem. The STR market wanted a comprehensive home insurance product that took coverage well above what the domestic market offered. We did that and now are 60,000+ policies in. We believe the same approach is going to work with Waivo.
For two years, we asked owners and managers what the friction points were with the current damage protection programs offered in the STR market. Here’s what we heard from them:
- We never know what’s going to be covered and what’s going to be denied, so we end up having a damage protection program as well as requiring a security deposit.
- We feel like insurance companies make all the money, and we get the short-end of the deal.
- We’re considering self-funding our own damage protection program as we don’t have that much damage, but we aren’t licensed, don’t know how to deal with the taxes to the state, and don’t want to get in trouble or fined by our state insurance commissioner.
- Damage claims always end up taking a lot of time and a lot of documentation, so sometimes we wonder if it’s even worth it.
- Communication with guests and owners about a damage incident is always a pain point.
Waivo solves all these problems.
How is Waivo a better source of revenue for owners, hosts and managers?
Darren: The average damage protection program charges a traveler $49 for $1,500 in coverage. With other providers, that $49 gets divided up between middlemen. We eliminate that and pass the savings on in a few ways, but the lion share goes to the Waivo client.
What limits of coverage do you offer, and how much do they cost?
Darren: We offer limits of coverage from $500 to $10,000 as every owner or manager has different needs. We do not publicly display our pricing as that is determined based on various factors specific to each client.
Can you customize your product to each client? If so, is it going to be tough for you to scale as customization takes a lot of time and effort?
Darren: Yes, we will grow slower because we don’t have an “easy button,” if you will. Our approach is to have client loyalty and virtually no turnover. Once a client signs up with Waivo, they are a client for life. We believe there is simply no better way to manage damage protection in the STR industry. Waivo is the culmination of 2 years of research.
How difficult is it for a manager or individual owner/operator to implement Waivo into their current business?
Darren: It’s very easy; In fact, that is another cost savings component we discussed earlier. There is no reason for damage to be complicated. We simplify the whole process.
How can owners, hosts and managers find out more?
Darren: The best thing to do is visit waivo.io and request a consultation. We then have a 30- or 60-minute call/demo to discuss needs and see if Waivo makes sense.
FAQs: Do you need short-term rental insurance?
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