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FAQ: Agency.CapeHolidays Management Services

FAQ’s

FAQ's About Airbnb (3)

New Airbnb owners should be aware of the hosting risks of Airbnb and do something to limit it.

NOTE: In general, you may never even encounter any of these issues. Reading about these risks may scare many owners. If that is the case then you make take this as an absolute. It’s not. The risks are very low.  

Let’s consider a list of risks of hosting Airbnb guests and solutions here:

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 There Are Other Ways To Reduce Risk: Discrimination Is Absolute Useless As A Measure!

The age of people, their sexual orientation, the colour of their skin, their physical inabilities, etc. do not define if they will trample your home, or expose you to risk. 

 Risk comes in all possible disguises.   
Read more on vetting guests

You can set an age limit for kids. But that’s about it. You can share liability risks. But only the guest can decide on your honest rules and warnings that will lower expectations.

Today, with Airbnb-homeowner and guest reviews you  get a legal way to discriminate between good and bad 

Consider Transparency As Your Risk Reducing Measure!

Bad Airbnb guests have previous public reviews. And if they are not good you don’t have to accept their booking. If they have no reviews you can try and qualify them. But  there is no obligation to accommodate zero-reviewed-guest. .

We have found the change in guests behaviour pre and post the arrival of Airbnb significant. In the past guests would have very little respect. Today they care. Even owners have jacked up their offering.  Because no one gets away with bad stuff today.  

Transparency: Guests do care about their public profile.

The solution today is not discrimination; the real issue is rather: from which marketing site does the guest originate from? If the guest is an Airbnb referral the risk is less than when compared to any other website where there are no social profile risks | no real transparency.

NOTE: There is no foolproof way. Things can go wrong. And the way this world operates it will go wrong. But we should always try to minimise risk. 

airbnb-discrimination

 

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airbnb-foolproof-audit

 Underestimate The Ingenuity of Complete Fools.    

This is really well said. In the Airbnb shorter rental business we cannot be more vigilant to the ingenuity of complete fools
When I use the word fool it’s not intended as a judgment; the intention is to rather say, ignorant person. Ignorant in its actions and choices. And these actions and decisions can be the  cause of serious damages and costs .  
All we need is to do what is reasonable to counteract these fools. Understanding we will never cover all ingenuity of complete fools. We, therefore, those owners do a foolproof audit. And keep on fine-tuning it. 

List of possible issues to recover during your foolproof audit.

Fool Proof Checks

Owner Only Protected Area

This content is password-protected. Ask for password on your mobile via WhatsApp Me HERE! OR try +828702004 Then please verify with your password to unlock the content.

In general, you want to replace expensive things with quality but easily replaceable items.
The most critical of these listed issues must be shared to your manager to add to the listing, where guests book as they must take responsibility for staying knowing about potential risks, and in your house manual and rules.
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FAQs: Accommodation Profitability (1)

Load-shedding affects us all negatively. And Airbnb guests are frustrated. Obviously we can see load-shedding as a curse or we can do better than our Airbnb host next door in making guests happier than they ever expected.

Unfortunately, the load-shedding curse has consequences; if you are not interested in fixing the issues it will negatively affect your income.  It may even cause your house to burn down.  And we had such a close encounter yesterday. Luck was on our side.

Unsuspecting guests booked into the beautiful Mbali. They went out and left the “things” to charge. When the power got back the surge caused an issue; heat, then a flame and the next thing a fire.
CapeTown airbnb Loadshedding
This is not one of the emails with photos we like to send any of our owners ever:
 loadsheddingairbnbcapetown
“When the power came back on, after load-shedding, there was a power surge that sparked an electrical fire in the main bedroom. Thanks to the quick responses from Security and the fire department the house is ok. The main bedroom has water and smoke damage as the carpet caught alight. Beyond that, all seems OK”.

How Do Propose You Fix These Load-Shedding Issues?

  1. The obvious conclusion we can draw is that guests must unplug and switch plugs off.  But you are missing the FOOL. Guests are sophisticated FOOLs. It’s also called Murphy. If it can go wrong it will go wrong.  The only way to resolve this issue is to take full responsibility, do a FOOLPROOF Audit try and make it impossible for guests to make mistakes. The following steps are designed to protect you from Murphy……
  2. It’s critical that all owners install power surge protectors as soon as possible. With labour it should be less than R1000.
  3. We highly recommend owners invest in a simple power backup system at about R8000 (after discount). Not only will it ensure income it may even increase it. More here on what we suggest.
  4. If you don’t have a gas stovetop we suggest a one plate gas burner (more here).
  5. Fire and monoxide detector should be a standard fixture to any home.
  6. Ensure that you have liability insurance against guest claims and your insurance guys are aware you are doing short term rentals. 

Even though this could have been a major disaster; quick action by many roleplayers prevented a calamity. And it was great to get the owner sharing the following with us:

Elmarie,

Thank goodness I have the best team ever, I appreciate all you are doing to get us back in business.
It was quite a shock to read what happened. I had no idea about Surge adapters and will now investigate what they are and if I need them anywhere else.

 


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Management FAQs (5)

I regularly get questions like, “Are you taking a big enough breakage deposit?” 

Injuries, accidents and your liability seem to be on the back burner. 

But let me answer your breakage deposit concern first. 

As an owner, you want to protect your belongings against breakages. You can throw money at the problem or you make it as foolproof as possible. 

After a thorough foolproof audit and making changes, the next defense is a breakage deposit. 

Read more on Foolproof Audit
What to check for when doing a foolproof audit – get it here.

How high should the breakage be to cover your home? Can you consider any figure you believe is high enough? 

Okay. You decide to hit them hard with a high breakage deposit. But the consequence is; no more bookings. Nothing. 

Obviously, we need to consider the risk. How many breakages occur and how severe are they? 

  • How often do we claim for breakages from guests? Probably less than 1%.
  • Has our conservative breakage deposit covered these breakages? 99% of the time. 

Instead of limiting or stopping bookings it’s our view to get a breakage deposit about equal to one day’s rates during high season. 

But you may be risk-averse and want more. Your only choice (not really a choice) is to get your short term insurer involved. You must tell him you do short term accommodation and want insurance for breakages, accidents and liability claims. 

Let’s get back to breakages:

  • If breakage is more than the deposit, then insurance must kick in. It’s easier than taking legal action against the guest. 
  • If another non-guest with access to the home breaks something or has an accident the insurance must cover the loss. 
  • Obviously, if it is malicious damage the owner can take legal action. 

Action:

  1. Get insurance and third-party liability insurance. 
  2. Set a reasonable breakage deposit. 
  3. Do a foolproof audit. And act on it.

In general, short term rental accommodation business is easy if you do the common sense issues well. They are simple. But relentlessly risky if skimped.

P.S. If it can break it will break. This does not mean we must change to plastic plates and glasses. Everyday use items must be easily replaceable in the blink of an eye. To claim from a guest for such accidental breakages is not ideal.

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A few owners only want occasional bookings and not interested in maximising income.

Yes. We can assist you.

Some Cape Town Accommodation owners only want to get one, two or three bookings during the year. And nothing more. 

We just need to agree to a different T&Cs (see it here) for your specific needs. 

These owners either;

  • tend to live in their homes during the year. 
  • owners who only want a few guests through their home. 

These owners keep the home for their own use or no use during the year and make certain dates exclusively available to CapeHolidays. Agency.CapeHolidays.info are 100% responsible for bookings during this time and the owner will honour all bookings during the agreed availability period. See the consequences and responsibilities for Instant Bookings.

Owners who don’t live in their homes during the year may want the management of their accommodation while they are not here; our T&Cs do not provide for this function. And these owners will need to discuss their needs with us clearly to understand their needs and agree on the management fee to oversee the home during the empty time.

Can You Assist if I only want occasional bookings? Read this FAQ.

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Typical Airbnb House Rules.

The list below may be typical but only the minimum. Each homeowner must take this list and complete it specifically to their own home.

When owners have additional house rules the newly  updated listed must be emailed to Agency.CapeHolidays.Info where the agent  will add it to online listings of the property.

Owner Only Protected Area

This content is password-protected. Ask for password on your mobile via WhatsApp Me HERE! OR try +828702004 Then please verify with your password to unlock the content.


The above list of minimum Airbnb House rules must be read by owners with the house manual, domestic person’s tasks and manager task manual.

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This answer is specific to owners who only rent out during school holidays

Here are some of the responsibilities of the domestic. For any deviation, the appointed manager must be notified immediately.  Below are 15 minimum functions for the domestic.   Available to Agency.CapeHolidays homeowners and management staff. 

Owner Only Protected Area

This content is password-protected. Ask for password on your mobile via WhatsApp Me HERE! OR try +828702004 Then please verify with your password to unlock the content.

Be friendly, be accommodating, be FIRM!

We want a 5 Star review but our integrity is not for sale.

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airbnb-foolproof-audit

 Underestimate The Ingenuity of Complete Fools.    

This is really well said. In the Airbnb shorter rental business we cannot be more vigilant to the ingenuity of complete fools
When I use the word fool it’s not intended as a judgment; the intention is to rather say, ignorant person. Ignorant in its actions and choices. And these actions and decisions can be the  cause of serious damages and costs .  
All we need is to do what is reasonable to counteract these fools. Understanding we will never cover all ingenuity of complete fools. We, therefore, those owners do a foolproof audit. And keep on fine-tuning it. 

List of possible issues to recover during your foolproof audit.

Fool Proof Checks

Owner Only Protected Area

This content is password-protected. Ask for password on your mobile via WhatsApp Me HERE! OR try +828702004 Then please verify with your password to unlock the content.

In general, you want to replace expensive things with quality but easily replaceable items.
The most critical of these listed issues must be shared to your manager to add to the listing, where guests book as they must take responsibility for staying knowing about potential risks, and in your house manual and rules.
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FAQs: T&Cs | Rules | Protection (10)

I regularly get questions like, “Are you taking a big enough breakage deposit?” 

Injuries, accidents and your liability seem to be on the back burner. 

But let me answer your breakage deposit concern first. 

As an owner, you want to protect your belongings against breakages. You can throw money at the problem or you make it as foolproof as possible. 

After a thorough foolproof audit and making changes, the next defense is a breakage deposit. 

Read more on Foolproof Audit
What to check for when doing a foolproof audit – get it here.

How high should the breakage be to cover your home? Can you consider any figure you believe is high enough? 

Okay. You decide to hit them hard with a high breakage deposit. But the consequence is; no more bookings. Nothing. 

Obviously, we need to consider the risk. How many breakages occur and how severe are they? 

  • How often do we claim for breakages from guests? Probably less than 1%.
  • Has our conservative breakage deposit covered these breakages? 99% of the time. 

Instead of limiting or stopping bookings it’s our view to get a breakage deposit about equal to one day’s rates during high season. 

But you may be risk-averse and want more. Your only choice (not really a choice) is to get your short term insurer involved. You must tell him you do short term accommodation and want insurance for breakages, accidents and liability claims. 

Let’s get back to breakages:

  • If breakage is more than the deposit, then insurance must kick in. It’s easier than taking legal action against the guest. 
  • If another non-guest with access to the home breaks something or has an accident the insurance must cover the loss. 
  • Obviously, if it is malicious damage the owner can take legal action. 

Action:

  1. Get insurance and third-party liability insurance. 
  2. Set a reasonable breakage deposit. 
  3. Do a foolproof audit. And act on it.

In general, short term rental accommodation business is easy if you do the common sense issues well. They are simple. But relentlessly risky if skimped.

P.S. If it can break it will break. This does not mean we must change to plastic plates and glasses. Everyday use items must be easily replaceable in the blink of an eye. To claim from a guest for such accidental breakages is not ideal.

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New Airbnb owners should be aware of the hosting risks of Airbnb and do something to limit it.

NOTE: In general, you may never even encounter any of these issues. Reading about these risks may scare many owners. If that is the case then you make take this as an absolute. It’s not. The risks are very low.  

Let’s consider a list of risks of hosting Airbnb guests and solutions here:

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Yes. Unfortunately, agreements are to keep the bad guys in line. 90% of people are trustworthy. The problem is complicated 10%. And we need to clarify very important clauses. Clarifying them with our T&Cs sets the scene explaining the rules we try to adhere to. Our ultimate aim is to protect the guest, you and us. But that’s the foundation from where we aim to make all interested parties happy. This is not easy. But we must start at the bottom and then work towards success.
Some of our T&C clauses ar set in stone. A few are negotiable to suit your unique needs. We believe it best for you to read our FAQs, the read the T&Cs and then ask questions. We have two T&Cs; one for owners who only rent only during school holidays and other renting out during the year. These two groups have unique needs.
Read the Agency CapeHolidays Owner T&Cs here.
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A few owners only want occasional bookings and not interested in maximising income.

Yes. We can assist you.

Some Cape Town Accommodation owners only want to get one, two or three bookings during the year. And nothing more. 

We just need to agree to a different T&Cs (see it here) for your specific needs. 

These owners either;

  • tend to live in their homes during the year. 
  • owners who only want a few guests through their home. 

These owners keep the home for their own use or no use during the year and make certain dates exclusively available to CapeHolidays. Agency.CapeHolidays.info are 100% responsible for bookings during this time and the owner will honour all bookings during the agreed availability period. See the consequences and responsibilities for Instant Bookings.

Owners who don’t live in their homes during the year may want the management of their accommodation while they are not here; our T&Cs do not provide for this function. And these owners will need to discuss their needs with us clearly to understand their needs and agree on the management fee to oversee the home during the empty time.

Can You Assist if I only want occasional bookings? Read this FAQ.

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An Owner Pieter recommended Sandra and husband John. Around the dining table, they heard about the slug of money Pieter got renting his home over peak. 

The one couple got easy money over Christmas and the others wanted to be part of the rainbow. 

Sandra showed us their upmarket apartment close to the beach. It was not guest ready yet. But we assisted in staging the accommodation and the photos were really great. This is going to be a winner. 

We sent them the T&Cs to read, discuss, agree, sign and send back. 

Nothing. Eventually, we got an email;

We know Peter who has a property that you have rented over the high season period. We are comfortable with a similar arrangement with our property. 

Long story short; the: similar arrangement was based on a handshake. Although low incidence, renting out accommodation has various risks. And things had to change. Easy verbal arrangements are great and easy but…. 

Various parties with different expectations make it difficult to just shake hands on hope for the best:

  1. The owner has risks, fears, and needs. 
  2. Guests have high expectations. 
  3. The management agent must address the issues of the owner and guests. 
  4. The provider Airbnb, Booking.com or other third-party agents has its own set of rules. 
  5. And where there is money the one holding it is controlling the roost. 

The rare incidents can be severe. Let me explain:

Since starting out Cape Town Management Agency during 2009 we only had three cancellations due to extenuating circumstances. All during 2019. An insignificant issue as measured in incidence and 4% in value. 

The three owners feeling the burn and are now out of pocket. These cancellations occur last minute. And in most cases, guests book at least two months in advance. Meaning; we will not get another booking. 

Two of the affected owners, we paid a substantial amount, said they were not aware we market their home on Airbnb and did not realise the risk.

One owner asked us to share the risks in more detail. Obviously, this is one example of many. 

An agreement has various purposes:

  • It draws the lines within which the guest, owner, and agent plays the game. 
  • It sets out and explains expectations for parties. It shares timelines, responsibilities, and duties. 
  • It explains the risks in no uncertain terms. And owners have the right to know. 
  • It keeps all involved as honest as is possible. 
  • It indicates to us that we have the right to represent the owner and the owner is committed. 
  • In exchange for generating an income, for the committed owner, we brand the owner’s home with the trustworthiness we established over many years. These include being SuperHosts and having nearly a thousand 4.9 out of 5 Star reviews. And we cannot risk losing these with owners who say, “Sorry, we shook hands and you did not tell me about that!” 
  • Money complicates things. Example: we get paid by Airbnb, we paid the owner; what happens when there’s a refund or cancellation? Airbnb immediately takes the money from us. Now we need to recover the money from the owner. This can become a mess when based on a cordial handshake. 

Our Terms and conditions are general. It may not cover all your specific needs. Certain clauses are negotiable others not. We can add, and adapt some. 

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Yes. It happens. How do we manage future bookings for owners who want to sell or who are very sick? 

Obviously, if you pass away it’s an extenuating circumstance and we are allowed to cancel. With terminal illness or selling of your accommodation, you have a transition period where you may want the bookings to continue. And it is possible.

Let me remind you of the T&C clause in question:

3.3 If the OWNER cancels or cannot host as agreed, a confirmed booking, a penalty of US$1500 will be paid by the OWNER to the AGENT and the OWNER will be kept liable for any additional losses incurred by the guest who made the booking and any losses occurred by the AGENT, excluding ‘Acts of God’.T&Cs

This clause does not change at all, other than for extenuating circumstances.

 But there is a way to limit the exposure and it is very simple: 

You close the future booking window from 12 to 18 months to only three months in advance.

This means at any time when the owner sells their property, only the next three months’ worth of bookings must be honoured. As you know; estate transfers take about three months. 

 If this interests the owner, they must just ask us in writing to only open a rolling three-month booking window. 

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 There Are Other Ways To Reduce Risk: Discrimination Is Absolute Useless As A Measure!

The age of people, their sexual orientation, the colour of their skin, their physical inabilities, etc. do not define if they will trample your home, or expose you to risk. 

 Risk comes in all possible disguises.   
Read more on vetting guests

You can set an age limit for kids. But that’s about it. You can share liability risks. But only the guest can decide on your honest rules and warnings that will lower expectations.

Today, with Airbnb-homeowner and guest reviews you  get a legal way to discriminate between good and bad 

Consider Transparency As Your Risk Reducing Measure!

Bad Airbnb guests have previous public reviews. And if they are not good you don’t have to accept their booking. If they have no reviews you can try and qualify them. But  there is no obligation to accommodate zero-reviewed-guest. .

We have found the change in guests behaviour pre and post the arrival of Airbnb significant. In the past guests would have very little respect. Today they care. Even owners have jacked up their offering.  Because no one gets away with bad stuff today.  

Transparency: Guests do care about their public profile.

The solution today is not discrimination; the real issue is rather: from which marketing site does the guest originate from? If the guest is an Airbnb referral the risk is less than when compared to any other website where there are no social profile risks | no real transparency.

NOTE: There is no foolproof way. Things can go wrong. And the way this world operates it will go wrong. But we should always try to minimise risk. 

airbnb-discrimination

 

Did you find this FAQ helpful?
0
0

This answer is specific to owners who only rent out during school holidays

Here are some of the responsibilities of the domestic. For any deviation, the appointed manager must be notified immediately.  Below are 15 minimum functions for the domestic.   Available to Agency.CapeHolidays homeowners and management staff. 

Owner Only Protected Area

This content is password-protected. Ask for password on your mobile via WhatsApp Me HERE! OR try +828702004 Then please verify with your password to unlock the content.

Be friendly, be accommodating, be FIRM!

We want a 5 Star review but our integrity is not for sale.

Did you find this FAQ helpful?
0
0
airbnb-foolproof-audit

 Underestimate The Ingenuity of Complete Fools.    

This is really well said. In the Airbnb shorter rental business we cannot be more vigilant to the ingenuity of complete fools
When I use the word fool it’s not intended as a judgment; the intention is to rather say, ignorant person. Ignorant in its actions and choices. And these actions and decisions can be the  cause of serious damages and costs .  
All we need is to do what is reasonable to counteract these fools. Understanding we will never cover all ingenuity of complete fools. We, therefore, those owners do a foolproof audit. And keep on fine-tuning it. 

List of possible issues to recover during your foolproof audit.

Fool Proof Checks

Owner Only Protected Area

This content is password-protected. Ask for password on your mobile via WhatsApp Me HERE! OR try +828702004 Then please verify with your password to unlock the content.

In general, you want to replace expensive things with quality but easily replaceable items.
The most critical of these listed issues must be shared to your manager to add to the listing, where guests book as they must take responsibility for staying knowing about potential risks, and in your house manual and rules.
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It’s obvious, after COVID 19, that the bad brings out the worst in some and the best in others. It’s for this reason that we decided to revisit short term rental insurance to best protect our Cape Town accommodation owners and the rental agency (Agency.CapeHolidays.info) they appointed to manage their accommodation.

BTW: You know we had a 60 day zero refund cancellation policy with Airbnb but they temporarily negated that, at the start of the pandemic. And can still apply it under extenuating circumstances. Therefore we cannot continue being at risk at their will. There must be a better way to protect income.

 

 

 

 

 

 

The main concerns to address:

  1. Better protect income when disasters strike for all involved.
  2. Evade the excuse by random insurers “I’ll not pay because of non-disclosure of material facts!”
  3. To protect all parties the agent must be included as a co-insured. As the agent is not the asset holder, the agent is exposed because the agency cannot independently insure.
  4. Although we recommend Incompass (see letter below), we have no affiliation. We hope all our owners will benefit as a group using Incompass. An owner can choose their provider as long as 1, 2, and 3 are adhered too. 
  5. The monthly fees should be less or similar to what the owner is currently paying – just correctly structured.

Actions To Take: 

We will require owners to ensure their policies protect them correctly and that the protection is extended to their agent. The following form needs to be sent to your insurer and sent back to us after your insurance provider completes it (find it here).  


We believe we have identified such a company. 

Incompass commenced in 2004 with a specialised team. Today they are South Africa’s largest Guest House Insurance brokerage. Focusing on both personal and commercial for the tourism industry. Even during the pandemic Jan Wink, Managing Director at Incompass, explains how they paid out 1000s of claims (see news article here).

The following is a letter from Jan to our owners on what the critical aspects are we need to consider. 

Hospitality Insurance To Protect Against Loss

Dear Agency.CapeHolidays.Info Owner

You agreed with Agency.CapeHolidays.Info to manage and market your home on listing sites like Airbnb. You expect a fair return. And from experience, you know you are in good hands.

You were well on your way. But then COVID struck. Everyone in the industry suffered massive losses, with booking income dropping right down to zero. And it remained at zero for a long time… The COVID havoc made you think. Made us all think about the exposure to risks, and in this case specifically to the loss of income.

No one expected the unreasonable and unjustified harsh attitude AirBnB (and other booking platforms) would take towards their hosts. All hospitality establishments experienced frustration.

At Incompass Insurance Consultants we create bespoke insurance solutions for our hospitality accommodation clients – we address risks such as loss of income, public liability, damage or theft by guests to name a few.

Unfortunately, most people assume that by having some kind of insurance in place, they’re automatically covered. That’s not necessarily the case – you might be insured on a personal policy, that covers you only in your personal capacity – meaning liability & theft claims will not be covered should the property be used for business purposes. And short term letting is considered business use by South African insurers.

Your property’s “type of use” has to include business use, or else any claim could be rejected (even geyser bursts or storm damage). The insurer will use their favourite rejection reason: it’s called “non-disclosure of material facts”. This basically means they were not made aware of the actual type of use of the property and hence will not be settling the claim.

But wait – you called the call centre and told them on the phone that you’re renting the place out. Which means you disclosed, and you should be insured right?

Right?

Except, you might not be. The truth is, that statement you made to the call centre agent often means very little to them. They can often only read from the options available on their screen… What you should rather do is pose 5 specific questions to them, and ask for their answer in writing:

  • If my short-term letting guest accidentally burns down the house, am I covered?
  • If a short-term letting guest falls down the stairs and sue me for their injuries, am I covered?
  • If a short-term guest forgets to lock the front door on their way out and I’m burgled without forced entry, am I covered?
  • A management agent looks after the property and bookings for me, am I covered if they advise guests incorrectly, forget to lock the front door or accidentally cause damage?
  • If my guest cannot honour his booking due to being hospitalised or attending a funeral, would my loss of income be covered?

Chances are, the words “short term paying guest” is going to result in all of your questions being answered with a resounding “NOT COVERED”. If you receive NO as an answer to any of the above, then you can be sure that you don’t have the widest cover available to short term letting establishments. If you’re going to bother paying insurance premiums, don’t you want to be sure that the cover is 100% correct? Just because you pay your premiums doesn’t mean you’re correctly covered.

An additional complication is that your property is managed by a third party. You’re not even controlling the risk… Agency.CapeHolidays.Info often manages all aspects of the booking process – marketing, communicating with the guests, handing over keys, showing guests the “house rules”, dealing with guest complaints, cleaning and being responsible for maintenance as well as repairs & replacement. Agency.CapeHolidays.Info is in full control of the risk, and therefore really needs to be noted as a co-insured. Agency.CapeHolidays.Info has an insurable interest.

Incompass Insurance Consultants specialises in short term letting insurance. We strongly advise owners to co-insure their agency when possible, because the agency is part and parcel of the success or failure of the enterprise. The agency is often in full control of the risk, more so than the property owner. And for this reason, we always include the management agent as a co-insured – it gives the insurer fewer reasons to reject a claim one day.

Incompass Insurance Consultants help ensure that our clients, who rent out their premises (via agencies or other) to short term paying guests, are correctly (and competitively) insured. It’s so much a part of what we do that we are the largest hospitality establishment insurance brokerage in South Africa and are the preferred insurance provider for the NAA, GHASA and the Tourism Grading Council.

What kind of cover does a guest establishment require?

  • Commercial public liability cover that will pay out should either of the owner or management be negligent in not pointing out specific risks such as slippery tiles
  • Damage caused by guests, such as red wine stains on carpets, or accidentally breaking an appliance (guests can sometimes do really stupid things…)
  • Theft by guests, during the booking period
  • No alarm requirements (guests often do not adhere or can’t remember the code)
  • No forcible entry required (even when the guest goes out for the day) whilst the property is tenanted (between arrival and departure date)
  • Loss of income cover – in case of fire, storm damage, burglaries, construction noise within 100m, cancellation beyond the control of the guest, and more
  • Locks and keys (guests sometimes take the keys with them)
  • Plumbing and electrical repairs, such as blocked toilets/drains
  • Mechanical repairs to tv’s, hi-fi’s, fridges, freezers, stoves, microwaves, washing machines, tumble dryers, dishwashers – up to R3,000 with an excess of the only R280

It’s not in your (and your agent’s) interest to have the incorrect insurance in place. It’s also not in your interest to pay a higher premium than necessary. At Incompass we address both these issues, thereby giving our clients the widest cover at the most affordable premiums (often lower compared to personal insurance premiums).

Disclosing to your insurer’s call centre agent that you’re an AirBnB host is not enough – you need written confirmation, signed and copy stamped, that they can answer yes to most if not all of those 5 very important questions.

For more information, visit www.incompass-insurance.co.za/airbnb

By Jan Wink,

Incompass Insurance Consultants (FSP23418)


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School Holiday Owners (8)

I regularly get questions like, “Are you taking a big enough breakage deposit?” 

Injuries, accidents and your liability seem to be on the back burner. 

But let me answer your breakage deposit concern first. 

As an owner, you want to protect your belongings against breakages. You can throw money at the problem or you make it as foolproof as possible. 

After a thorough foolproof audit and making changes, the next defense is a breakage deposit. 

Read more on Foolproof Audit
What to check for when doing a foolproof audit – get it here.

How high should the breakage be to cover your home? Can you consider any figure you believe is high enough? 

Okay. You decide to hit them hard with a high breakage deposit. But the consequence is; no more bookings. Nothing. 

Obviously, we need to consider the risk. How many breakages occur and how severe are they? 

  • How often do we claim for breakages from guests? Probably less than 1%.
  • Has our conservative breakage deposit covered these breakages? 99% of the time. 

Instead of limiting or stopping bookings it’s our view to get a breakage deposit about equal to one day’s rates during high season. 

But you may be risk-averse and want more. Your only choice (not really a choice) is to get your short term insurer involved. You must tell him you do short term accommodation and want insurance for breakages, accidents and liability claims. 

Let’s get back to breakages:

  • If breakage is more than the deposit, then insurance must kick in. It’s easier than taking legal action against the guest. 
  • If another non-guest with access to the home breaks something or has an accident the insurance must cover the loss. 
  • Obviously, if it is malicious damage the owner can take legal action. 

Action:

  1. Get insurance and third-party liability insurance. 
  2. Set a reasonable breakage deposit. 
  3. Do a foolproof audit. And act on it.

In general, short term rental accommodation business is easy if you do the common sense issues well. They are simple. But relentlessly risky if skimped.

P.S. If it can break it will break. This does not mean we must change to plastic plates and glasses. Everyday use items must be easily replaceable in the blink of an eye. To claim from a guest for such accidental breakages is not ideal.

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0
0

New Airbnb owners should be aware of the hosting risks of Airbnb and do something to limit it.

NOTE: In general, you may never even encounter any of these issues. Reading about these risks may scare many owners. If that is the case then you make take this as an absolute. It’s not. The risks are very low.  

Let’s consider a list of risks of hosting Airbnb guests and solutions here:

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0
Yes. Unfortunately, agreements are to keep the bad guys in line. 90% of people are trustworthy. The problem is complicated 10%. And we need to clarify very important clauses. Clarifying them with our T&Cs sets the scene explaining the rules we try to adhere to. Our ultimate aim is to protect the guest, you and us. But that’s the foundation from where we aim to make all interested parties happy. This is not easy. But we must start at the bottom and then work towards success.
Some of our T&C clauses ar set in stone. A few are negotiable to suit your unique needs. We believe it best for you to read our FAQs, the read the T&Cs and then ask questions. We have two T&Cs; one for owners who only rent only during school holidays and other renting out during the year. These two groups have unique needs.
Read the Agency CapeHolidays Owner T&Cs here.
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An Owner Pieter recommended Sandra and husband John. Around the dining table, they heard about the slug of money Pieter got renting his home over peak. 

The one couple got easy money over Christmas and the others wanted to be part of the rainbow. 

Sandra showed us their upmarket apartment close to the beach. It was not guest ready yet. But we assisted in staging the accommodation and the photos were really great. This is going to be a winner. 

We sent them the T&Cs to read, discuss, agree, sign and send back. 

Nothing. Eventually, we got an email;

We know Peter who has a property that you have rented over the high season period. We are comfortable with a similar arrangement with our property. 

Long story short; the: similar arrangement was based on a handshake. Although low incidence, renting out accommodation has various risks. And things had to change. Easy verbal arrangements are great and easy but…. 

Various parties with different expectations make it difficult to just shake hands on hope for the best:

  1. The owner has risks, fears, and needs. 
  2. Guests have high expectations. 
  3. The management agent must address the issues of the owner and guests. 
  4. The provider Airbnb, Booking.com or other third-party agents has its own set of rules. 
  5. And where there is money the one holding it is controlling the roost. 

The rare incidents can be severe. Let me explain:

Since starting out Cape Town Management Agency during 2009 we only had three cancellations due to extenuating circumstances. All during 2019. An insignificant issue as measured in incidence and 4% in value. 

The three owners feeling the burn and are now out of pocket. These cancellations occur last minute. And in most cases, guests book at least two months in advance. Meaning; we will not get another booking. 

Two of the affected owners, we paid a substantial amount, said they were not aware we market their home on Airbnb and did not realise the risk.

One owner asked us to share the risks in more detail. Obviously, this is one example of many. 

An agreement has various purposes:

  • It draws the lines within which the guest, owner, and agent plays the game. 
  • It sets out and explains expectations for parties. It shares timelines, responsibilities, and duties. 
  • It explains the risks in no uncertain terms. And owners have the right to know. 
  • It keeps all involved as honest as is possible. 
  • It indicates to us that we have the right to represent the owner and the owner is committed. 
  • In exchange for generating an income, for the committed owner, we brand the owner’s home with the trustworthiness we established over many years. These include being SuperHosts and having nearly a thousand 4.9 out of 5 Star reviews. And we cannot risk losing these with owners who say, “Sorry, we shook hands and you did not tell me about that!” 
  • Money complicates things. Example: we get paid by Airbnb, we paid the owner; what happens when there’s a refund or cancellation? Airbnb immediately takes the money from us. Now we need to recover the money from the owner. This can become a mess when based on a cordial handshake. 

Our Terms and conditions are general. It may not cover all your specific needs. Certain clauses are negotiable others not. We can add, and adapt some. 

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Typical Airbnb House Rules.

The list below may be typical but only the minimum. Each homeowner must take this list and complete it specifically to their own home.

When owners have additional house rules the newly  updated listed must be emailed to Agency.CapeHolidays.Info where the agent  will add it to online listings of the property.

Owner Only Protected Area

This content is password-protected. Ask for password on your mobile via WhatsApp Me HERE! OR try +828702004 Then please verify with your password to unlock the content.


The above list of minimum Airbnb House rules must be read by owners with the house manual, domestic person’s tasks and manager task manual.

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 There Are Other Ways To Reduce Risk: Discrimination Is Absolute Useless As A Measure!

The age of people, their sexual orientation, the colour of their skin, their physical inabilities, etc. do not define if they will trample your home, or expose you to risk. 

 Risk comes in all possible disguises.   
Read more on vetting guests

You can set an age limit for kids. But that’s about it. You can share liability risks. But only the guest can decide on your honest rules and warnings that will lower expectations.

Today, with Airbnb-homeowner and guest reviews you  get a legal way to discriminate between good and bad 

Consider Transparency As Your Risk Reducing Measure!

Bad Airbnb guests have previous public reviews. And if they are not good you don’t have to accept their booking. If they have no reviews you can try and qualify them. But  there is no obligation to accommodate zero-reviewed-guest. .

We have found the change in guests behaviour pre and post the arrival of Airbnb significant. In the past guests would have very little respect. Today they care. Even owners have jacked up their offering.  Because no one gets away with bad stuff today.  

Transparency: Guests do care about their public profile.

The solution today is not discrimination; the real issue is rather: from which marketing site does the guest originate from? If the guest is an Airbnb referral the risk is less than when compared to any other website where there are no social profile risks | no real transparency.

NOTE: There is no foolproof way. Things can go wrong. And the way this world operates it will go wrong. But we should always try to minimise risk. 

airbnb-discrimination

 

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This answer is specific to owners who only rent out during school holidays

Here are some of the responsibilities of the domestic. For any deviation, the appointed manager must be notified immediately.  Below are 15 minimum functions for the domestic.   Available to Agency.CapeHolidays homeowners and management staff. 

Owner Only Protected Area

This content is password-protected. Ask for password on your mobile via WhatsApp Me HERE! OR try +828702004 Then please verify with your password to unlock the content.

Be friendly, be accommodating, be FIRM!

We want a 5 Star review but our integrity is not for sale.

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0
0
airbnb-foolproof-audit

 Underestimate The Ingenuity of Complete Fools.    

This is really well said. In the Airbnb shorter rental business we cannot be more vigilant to the ingenuity of complete fools
When I use the word fool it’s not intended as a judgment; the intention is to rather say, ignorant person. Ignorant in its actions and choices. And these actions and decisions can be the  cause of serious damages and costs .  
All we need is to do what is reasonable to counteract these fools. Understanding we will never cover all ingenuity of complete fools. We, therefore, those owners do a foolproof audit. And keep on fine-tuning it. 

List of possible issues to recover during your foolproof audit.

Fool Proof Checks

Owner Only Protected Area

This content is password-protected. Ask for password on your mobile via WhatsApp Me HERE! OR try +828702004 Then please verify with your password to unlock the content.

In general, you want to replace expensive things with quality but easily replaceable items.
The most critical of these listed issues must be shared to your manager to add to the listing, where guests book as they must take responsibility for staying knowing about potential risks, and in your house manual and rules.
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All FAQs: Home Owner (12)

Load-shedding affects us all negatively. And Airbnb guests are frustrated. Obviously we can see load-shedding as a curse or we can do better than our Airbnb host next door in making guests happier than they ever expected.

Unfortunately, the load-shedding curse has consequences; if you are not interested in fixing the issues it will negatively affect your income.  It may even cause your house to burn down.  And we had such a close encounter yesterday. Luck was on our side.

Unsuspecting guests booked into the beautiful Mbali. They went out and left the “things” to charge. When the power got back the surge caused an issue; heat, then a flame and the next thing a fire.
CapeTown airbnb Loadshedding
This is not one of the emails with photos we like to send any of our owners ever:
 loadsheddingairbnbcapetown
“When the power came back on, after load-shedding, there was a power surge that sparked an electrical fire in the main bedroom. Thanks to the quick responses from Security and the fire department the house is ok. The main bedroom has water and smoke damage as the carpet caught alight. Beyond that, all seems OK”.

How Do Propose You Fix These Load-Shedding Issues?

  1. The obvious conclusion we can draw is that guests must unplug and switch plugs off.  But you are missing the FOOL. Guests are sophisticated FOOLs. It’s also called Murphy. If it can go wrong it will go wrong.  The only way to resolve this issue is to take full responsibility, do a FOOLPROOF Audit try and make it impossible for guests to make mistakes. The following steps are designed to protect you from Murphy……
  2. It’s critical that all owners install power surge protectors as soon as possible. With labour it should be less than R1000.
  3. We highly recommend owners invest in a simple power backup system at about R8000 (after discount). Not only will it ensure income it may even increase it. More here on what we suggest.
  4. If you don’t have a gas stovetop we suggest a one plate gas burner (more here).
  5. Fire and monoxide detector should be a standard fixture to any home.
  6. Ensure that you have liability insurance against guest claims and your insurance guys are aware you are doing short term rentals. 

Even though this could have been a major disaster; quick action by many roleplayers prevented a calamity. And it was great to get the owner sharing the following with us:

Elmarie,

Thank goodness I have the best team ever, I appreciate all you are doing to get us back in business.
It was quite a shock to read what happened. I had no idea about Surge adapters and will now investigate what they are and if I need them anywhere else.

 


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0
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I regularly get questions like, “Are you taking a big enough breakage deposit?” 

Injuries, accidents and your liability seem to be on the back burner. 

But let me answer your breakage deposit concern first. 

As an owner, you want to protect your belongings against breakages. You can throw money at the problem or you make it as foolproof as possible. 

After a thorough foolproof audit and making changes, the next defense is a breakage deposit. 

Read more on Foolproof Audit
What to check for when doing a foolproof audit – get it here.

How high should the breakage be to cover your home? Can you consider any figure you believe is high enough? 

Okay. You decide to hit them hard with a high breakage deposit. But the consequence is; no more bookings. Nothing. 

Obviously, we need to consider the risk. How many breakages occur and how severe are they? 

  • How often do we claim for breakages from guests? Probably less than 1%.
  • Has our conservative breakage deposit covered these breakages? 99% of the time. 

Instead of limiting or stopping bookings it’s our view to get a breakage deposit about equal to one day’s rates during high season. 

But you may be risk-averse and want more. Your only choice (not really a choice) is to get your short term insurer involved. You must tell him you do short term accommodation and want insurance for breakages, accidents and liability claims. 

Let’s get back to breakages:

  • If breakage is more than the deposit, then insurance must kick in. It’s easier than taking legal action against the guest. 
  • If another non-guest with access to the home breaks something or has an accident the insurance must cover the loss. 
  • Obviously, if it is malicious damage the owner can take legal action. 

Action:

  1. Get insurance and third-party liability insurance. 
  2. Set a reasonable breakage deposit. 
  3. Do a foolproof audit. And act on it.

In general, short term rental accommodation business is easy if you do the common sense issues well. They are simple. But relentlessly risky if skimped.

P.S. If it can break it will break. This does not mean we must change to plastic plates and glasses. Everyday use items must be easily replaceable in the blink of an eye. To claim from a guest for such accidental breakages is not ideal.

Did you find this FAQ helpful?
0
0

New Airbnb owners should be aware of the hosting risks of Airbnb and do something to limit it.

NOTE: In general, you may never even encounter any of these issues. Reading about these risks may scare many owners. If that is the case then you make take this as an absolute. It’s not. The risks are very low.  

Let’s consider a list of risks of hosting Airbnb guests and solutions here:

Did you find this FAQ helpful?
0
0
Yes. Unfortunately, agreements are to keep the bad guys in line. 90% of people are trustworthy. The problem is complicated 10%. And we need to clarify very important clauses. Clarifying them with our T&Cs sets the scene explaining the rules we try to adhere to. Our ultimate aim is to protect the guest, you and us. But that’s the foundation from where we aim to make all interested parties happy. This is not easy. But we must start at the bottom and then work towards success.
Some of our T&C clauses ar set in stone. A few are negotiable to suit your unique needs. We believe it best for you to read our FAQs, the read the T&Cs and then ask questions. We have two T&Cs; one for owners who only rent only during school holidays and other renting out during the year. These two groups have unique needs.
Read the Agency CapeHolidays Owner T&Cs here.
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0
0

A few owners only want occasional bookings and not interested in maximising income.

Yes. We can assist you.

Some Cape Town Accommodation owners only want to get one, two or three bookings during the year. And nothing more. 

We just need to agree to a different T&Cs (see it here) for your specific needs. 

These owners either;

  • tend to live in their homes during the year. 
  • owners who only want a few guests through their home. 

These owners keep the home for their own use or no use during the year and make certain dates exclusively available to CapeHolidays. Agency.CapeHolidays.info are 100% responsible for bookings during this time and the owner will honour all bookings during the agreed availability period. See the consequences and responsibilities for Instant Bookings.

Owners who don’t live in their homes during the year may want the management of their accommodation while they are not here; our T&Cs do not provide for this function. And these owners will need to discuss their needs with us clearly to understand their needs and agree on the management fee to oversee the home during the empty time.

Can You Assist if I only want occasional bookings? Read this FAQ.

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0

An Owner Pieter recommended Sandra and husband John. Around the dining table, they heard about the slug of money Pieter got renting his home over peak. 

The one couple got easy money over Christmas and the others wanted to be part of the rainbow. 

Sandra showed us their upmarket apartment close to the beach. It was not guest ready yet. But we assisted in staging the accommodation and the photos were really great. This is going to be a winner. 

We sent them the T&Cs to read, discuss, agree, sign and send back. 

Nothing. Eventually, we got an email;

We know Peter who has a property that you have rented over the high season period. We are comfortable with a similar arrangement with our property. 

Long story short; the: similar arrangement was based on a handshake. Although low incidence, renting out accommodation has various risks. And things had to change. Easy verbal arrangements are great and easy but…. 

Various parties with different expectations make it difficult to just shake hands on hope for the best:

  1. The owner has risks, fears, and needs. 
  2. Guests have high expectations. 
  3. The management agent must address the issues of the owner and guests. 
  4. The provider Airbnb, Booking.com or other third-party agents has its own set of rules. 
  5. And where there is money the one holding it is controlling the roost. 

The rare incidents can be severe. Let me explain:

Since starting out Cape Town Management Agency during 2009 we only had three cancellations due to extenuating circumstances. All during 2019. An insignificant issue as measured in incidence and 4% in value. 

The three owners feeling the burn and are now out of pocket. These cancellations occur last minute. And in most cases, guests book at least two months in advance. Meaning; we will not get another booking. 

Two of the affected owners, we paid a substantial amount, said they were not aware we market their home on Airbnb and did not realise the risk.

One owner asked us to share the risks in more detail. Obviously, this is one example of many. 

An agreement has various purposes:

  • It draws the lines within which the guest, owner, and agent plays the game. 
  • It sets out and explains expectations for parties. It shares timelines, responsibilities, and duties. 
  • It explains the risks in no uncertain terms. And owners have the right to know. 
  • It keeps all involved as honest as is possible. 
  • It indicates to us that we have the right to represent the owner and the owner is committed. 
  • In exchange for generating an income, for the committed owner, we brand the owner’s home with the trustworthiness we established over many years. These include being SuperHosts and having nearly a thousand 4.9 out of 5 Star reviews. And we cannot risk losing these with owners who say, “Sorry, we shook hands and you did not tell me about that!” 
  • Money complicates things. Example: we get paid by Airbnb, we paid the owner; what happens when there’s a refund or cancellation? Airbnb immediately takes the money from us. Now we need to recover the money from the owner. This can become a mess when based on a cordial handshake. 

Our Terms and conditions are general. It may not cover all your specific needs. Certain clauses are negotiable others not. We can add, and adapt some. 

Did you find this FAQ helpful?
0
0

Typical Airbnb House Rules.

The list below may be typical but only the minimum. Each homeowner must take this list and complete it specifically to their own home.

When owners have additional house rules the newly  updated listed must be emailed to Agency.CapeHolidays.Info where the agent  will add it to online listings of the property.

Owner Only Protected Area

This content is password-protected. Ask for password on your mobile via WhatsApp Me HERE! OR try +828702004 Then please verify with your password to unlock the content.


The above list of minimum Airbnb House rules must be read by owners with the house manual, domestic person’s tasks and manager task manual.

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0
0

Yes. It happens. How do we manage future bookings for owners who want to sell or who are very sick? 

Obviously, if you pass away it’s an extenuating circumstance and we are allowed to cancel. With terminal illness or selling of your accommodation, you have a transition period where you may want the bookings to continue. And it is possible.

Let me remind you of the T&C clause in question:

3.3 If the OWNER cancels or cannot host as agreed, a confirmed booking, a penalty of US$1500 will be paid by the OWNER to the AGENT and the OWNER will be kept liable for any additional losses incurred by the guest who made the booking and any losses occurred by the AGENT, excluding ‘Acts of God’.T&Cs

This clause does not change at all, other than for extenuating circumstances.

 But there is a way to limit the exposure and it is very simple: 

You close the future booking window from 12 to 18 months to only three months in advance.

This means at any time when the owner sells their property, only the next three months’ worth of bookings must be honoured. As you know; estate transfers take about three months. 

 If this interests the owner, they must just ask us in writing to only open a rolling three-month booking window. 

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 There Are Other Ways To Reduce Risk: Discrimination Is Absolute Useless As A Measure!

The age of people, their sexual orientation, the colour of their skin, their physical inabilities, etc. do not define if they will trample your home, or expose you to risk. 

 Risk comes in all possible disguises.   
Read more on vetting guests

You can set an age limit for kids. But that’s about it. You can share liability risks. But only the guest can decide on your honest rules and warnings that will lower expectations.

Today, with Airbnb-homeowner and guest reviews you  get a legal way to discriminate between good and bad 

Consider Transparency As Your Risk Reducing Measure!

Bad Airbnb guests have previous public reviews. And if they are not good you don’t have to accept their booking. If they have no reviews you can try and qualify them. But  there is no obligation to accommodate zero-reviewed-guest. .

We have found the change in guests behaviour pre and post the arrival of Airbnb significant. In the past guests would have very little respect. Today they care. Even owners have jacked up their offering.  Because no one gets away with bad stuff today.  

Transparency: Guests do care about their public profile.

The solution today is not discrimination; the real issue is rather: from which marketing site does the guest originate from? If the guest is an Airbnb referral the risk is less than when compared to any other website where there are no social profile risks | no real transparency.

NOTE: There is no foolproof way. Things can go wrong. And the way this world operates it will go wrong. But we should always try to minimise risk. 

airbnb-discrimination

 

Did you find this FAQ helpful?
0
0

This answer is specific to owners who only rent out during school holidays

Here are some of the responsibilities of the domestic. For any deviation, the appointed manager must be notified immediately.  Below are 15 minimum functions for the domestic.   Available to Agency.CapeHolidays homeowners and management staff. 

Owner Only Protected Area

This content is password-protected. Ask for password on your mobile via WhatsApp Me HERE! OR try +828702004 Then please verify with your password to unlock the content.

Be friendly, be accommodating, be FIRM!

We want a 5 Star review but our integrity is not for sale.

Did you find this FAQ helpful?
0
0
airbnb-foolproof-audit

 Underestimate The Ingenuity of Complete Fools.    

This is really well said. In the Airbnb shorter rental business we cannot be more vigilant to the ingenuity of complete fools
When I use the word fool it’s not intended as a judgment; the intention is to rather say, ignorant person. Ignorant in its actions and choices. And these actions and decisions can be the  cause of serious damages and costs .  
All we need is to do what is reasonable to counteract these fools. Understanding we will never cover all ingenuity of complete fools. We, therefore, those owners do a foolproof audit. And keep on fine-tuning it. 

List of possible issues to recover during your foolproof audit.

Fool Proof Checks

Owner Only Protected Area

This content is password-protected. Ask for password on your mobile via WhatsApp Me HERE! OR try +828702004 Then please verify with your password to unlock the content.

In general, you want to replace expensive things with quality but easily replaceable items.
The most critical of these listed issues must be shared to your manager to add to the listing, where guests book as they must take responsibility for staying knowing about potential risks, and in your house manual and rules.
Did you find this FAQ helpful?
0
0

It’s obvious, after COVID 19, that the bad brings out the worst in some and the best in others. It’s for this reason that we decided to revisit short term rental insurance to best protect our Cape Town accommodation owners and the rental agency (Agency.CapeHolidays.info) they appointed to manage their accommodation.

BTW: You know we had a 60 day zero refund cancellation policy with Airbnb but they temporarily negated that, at the start of the pandemic. And can still apply it under extenuating circumstances. Therefore we cannot continue being at risk at their will. There must be a better way to protect income.

 

 

 

 

 

 

The main concerns to address:

  1. Better protect income when disasters strike for all involved.
  2. Evade the excuse by random insurers “I’ll not pay because of non-disclosure of material facts!”
  3. To protect all parties the agent must be included as a co-insured. As the agent is not the asset holder, the agent is exposed because the agency cannot independently insure.
  4. Although we recommend Incompass (see letter below), we have no affiliation. We hope all our owners will benefit as a group using Incompass. An owner can choose their provider as long as 1, 2, and 3 are adhered too. 
  5. The monthly fees should be less or similar to what the owner is currently paying – just correctly structured.

Actions To Take: 

We will require owners to ensure their policies protect them correctly and that the protection is extended to their agent. The following form needs to be sent to your insurer and sent back to us after your insurance provider completes it (find it here).  


We believe we have identified such a company. 

Incompass commenced in 2004 with a specialised team. Today they are South Africa’s largest Guest House Insurance brokerage. Focusing on both personal and commercial for the tourism industry. Even during the pandemic Jan Wink, Managing Director at Incompass, explains how they paid out 1000s of claims (see news article here).

The following is a letter from Jan to our owners on what the critical aspects are we need to consider. 

Hospitality Insurance To Protect Against Loss

Dear Agency.CapeHolidays.Info Owner

You agreed with Agency.CapeHolidays.Info to manage and market your home on listing sites like Airbnb. You expect a fair return. And from experience, you know you are in good hands.

You were well on your way. But then COVID struck. Everyone in the industry suffered massive losses, with booking income dropping right down to zero. And it remained at zero for a long time… The COVID havoc made you think. Made us all think about the exposure to risks, and in this case specifically to the loss of income.

No one expected the unreasonable and unjustified harsh attitude AirBnB (and other booking platforms) would take towards their hosts. All hospitality establishments experienced frustration.

At Incompass Insurance Consultants we create bespoke insurance solutions for our hospitality accommodation clients – we address risks such as loss of income, public liability, damage or theft by guests to name a few.

Unfortunately, most people assume that by having some kind of insurance in place, they’re automatically covered. That’s not necessarily the case – you might be insured on a personal policy, that covers you only in your personal capacity – meaning liability & theft claims will not be covered should the property be used for business purposes. And short term letting is considered business use by South African insurers.

Your property’s “type of use” has to include business use, or else any claim could be rejected (even geyser bursts or storm damage). The insurer will use their favourite rejection reason: it’s called “non-disclosure of material facts”. This basically means they were not made aware of the actual type of use of the property and hence will not be settling the claim.

But wait – you called the call centre and told them on the phone that you’re renting the place out. Which means you disclosed, and you should be insured right?

Right?

Except, you might not be. The truth is, that statement you made to the call centre agent often means very little to them. They can often only read from the options available on their screen… What you should rather do is pose 5 specific questions to them, and ask for their answer in writing:

  • If my short-term letting guest accidentally burns down the house, am I covered?
  • If a short-term letting guest falls down the stairs and sue me for their injuries, am I covered?
  • If a short-term guest forgets to lock the front door on their way out and I’m burgled without forced entry, am I covered?
  • A management agent looks after the property and bookings for me, am I covered if they advise guests incorrectly, forget to lock the front door or accidentally cause damage?
  • If my guest cannot honour his booking due to being hospitalised or attending a funeral, would my loss of income be covered?

Chances are, the words “short term paying guest” is going to result in all of your questions being answered with a resounding “NOT COVERED”. If you receive NO as an answer to any of the above, then you can be sure that you don’t have the widest cover available to short term letting establishments. If you’re going to bother paying insurance premiums, don’t you want to be sure that the cover is 100% correct? Just because you pay your premiums doesn’t mean you’re correctly covered.

An additional complication is that your property is managed by a third party. You’re not even controlling the risk… Agency.CapeHolidays.Info often manages all aspects of the booking process – marketing, communicating with the guests, handing over keys, showing guests the “house rules”, dealing with guest complaints, cleaning and being responsible for maintenance as well as repairs & replacement. Agency.CapeHolidays.Info is in full control of the risk, and therefore really needs to be noted as a co-insured. Agency.CapeHolidays.Info has an insurable interest.

Incompass Insurance Consultants specialises in short term letting insurance. We strongly advise owners to co-insure their agency when possible, because the agency is part and parcel of the success or failure of the enterprise. The agency is often in full control of the risk, more so than the property owner. And for this reason, we always include the management agent as a co-insured – it gives the insurer fewer reasons to reject a claim one day.

Incompass Insurance Consultants help ensure that our clients, who rent out their premises (via agencies or other) to short term paying guests, are correctly (and competitively) insured. It’s so much a part of what we do that we are the largest hospitality establishment insurance brokerage in South Africa and are the preferred insurance provider for the NAA, GHASA and the Tourism Grading Council.

What kind of cover does a guest establishment require?

  • Commercial public liability cover that will pay out should either of the owner or management be negligent in not pointing out specific risks such as slippery tiles
  • Damage caused by guests, such as red wine stains on carpets, or accidentally breaking an appliance (guests can sometimes do really stupid things…)
  • Theft by guests, during the booking period
  • No alarm requirements (guests often do not adhere or can’t remember the code)
  • No forcible entry required (even when the guest goes out for the day) whilst the property is tenanted (between arrival and departure date)
  • Loss of income cover – in case of fire, storm damage, burglaries, construction noise within 100m, cancellation beyond the control of the guest, and more
  • Locks and keys (guests sometimes take the keys with them)
  • Plumbing and electrical repairs, such as blocked toilets/drains
  • Mechanical repairs to tv’s, hi-fi’s, fridges, freezers, stoves, microwaves, washing machines, tumble dryers, dishwashers – up to R3,000 with an excess of the only R280

It’s not in your (and your agent’s) interest to have the incorrect insurance in place. It’s also not in your interest to pay a higher premium than necessary. At Incompass we address both these issues, thereby giving our clients the widest cover at the most affordable premiums (often lower compared to personal insurance premiums).

Disclosing to your insurer’s call centre agent that you’re an AirBnB host is not enough – you need written confirmation, signed and copy stamped, that they can answer yes to most if not all of those 5 very important questions.

For more information, visit www.incompass-insurance.co.za/airbnb

By Jan Wink,

Incompass Insurance Consultants (FSP23418)


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