Steve: Welcome to Keynotes, a podcast just for Costco homeowners.
This is where we explore how to get the most out of your relationship with
Costco, learn tips and tricks on how to make more income with your property,
and learn a little bit about the short term rental industry along the way.
I've been a vacationer since my twenties, and the team has finally let
me have this podcast so I can share everything I've learned with you.
I'm your host, Steve Schwab.
And this is keynotes keynotes.
I'm here today with John Slaughter from rental guardian, talking about
the Costco protection program.
Welcome, John.
Hey, Steve.
How are you?
Pretty good, . So today we're talking about the Costco protection program and
how it benefits the Costco homeowners.
And I guess for the very first question, we should probably ask you.
John, what is the Costco Protection Program?
Speaker 2: The Costco Protection Program was custom built for Costco
homeowners to protect them against the day to day damages and liabilities
and risks that come from renting your home as a commercial business.
Steve: And so, John, you gave us eight things that homeowners should know
about when it comes to the Costco Protection Program, and I'm just going
to go right down the list and ask you about each one, if that's okay.
Sounds good.
So for number one, can you explain how the buying power of Costco?
was used to create this program for our homeowners?
Speaker 2: Yeah, absolutely.
So because Costco, uh, at the time we've created this program had just
over 3, 000 units , um, we were able to aggregate everyone as a
whole instead of underwriting each Costco franchisee individually.
And so what we're able to do is drive down the pricing of the
program to be able to deliver a world class program unlike any other.
So But at the same time, whether a franchise had one property
or 10, 000 properties, they all had access to the same coverage
to deliver to their homeowners.
Speaker: So, for number two, you put liability coverage.
Speaker 2: Liability is such an important component of the program.
And there's a million dollars of coverage for liability to protect against
things that can occur when somebody gets injured and the guest claims
that the homeowner and the property manager and everybody involved in the
process was liable for their injuries.
And so, with this program, it covers that up to a million dollars.
Speaker: You know, I just, last week, got a call from a friend, not part of
Costco, but you know, somebody in the industry, He had somebody fall down
his stairs and they broke their back.
And he had to call the homeowner and let them know.
And so now the homeowner was concerned.
He didn't know quite what to do next.
I told him, you know, let's have a discussion.
And we, we walked through the steps, but he didn't have this protection.
And.
As a homeowner, having that extra million dollars of liability
is just a lot of peace of mind.
Speaker 2: It really is.
And whether a homeowner has their own liability coverage that will stand up
in a commercial situation, or whether they have their own homeowner's policy,
this will protect as a service from the time the guest checks in to the time the
guest checks out up to a million dollars for those liability claims that come in.
It's such a great product.
Speaker: So you said that the third thing we need to know about the Costco
protection program is structure coverage.
Speaker 2: Yeah, you know, I'm sure homeowners when they're thinking
about renting their home as a business, two things hit their mind.
What happens if somebody gets hurt and what happens if somebody causes
a fire or there's water flood or overflow or something of that nature.
And the structure of the home is when a.
Situation occurs where the damage is not just to an appliance, but
to the structure of the home, meaning it's gotten into the studs.
And so instead of just a stovetop fire, it's a full kitchen fire.
And that is now not just a $2,000 claim, but it's a 25,000 or $250,000 claim.
And so what this program brings to the table is $1 million of structure
coverage to be able to protect the structure of the home against those
types of risks that can occur.
Speaker: It's so great to have.
So for number four, you said of the things that homeowners need to know.
Speaker 2: You know, the contents is sort of the day to day damages that can occur
from a guest being on site and not being familiar with how to run the appliances
or whether or not the TV is a swivel TV when they're trying to eat dinner at
the table and they pull it off the wall accidentally and cause those damages.
So think of it as anything that's inside the home.
Um, traditionally found in a vacation rental or a short term rental that
could be damaged, whether it was the floors, cracked tiles, as well as
carpet stains, all the way up into the appliances, tables, chairs, TVs,
lamps, refrigerators, stuff like that.
Speaker: Here in Scottsdale, we just had an incident that the
Costco Protection Program covered.
It was for a leather couch, and there was a massive water damage
on a leather couch, unrepairable.
And the homeowner was really concerned like, Oh my gosh, I got a few
thousand dollars for this rental, but now I'm going to pay a couple
thousand dollars for this couch.
This is obviously not a good business deal going on here, right?
But our broker here was able to call Rental Guardian and get the
Costco Protection Program started.
And sure enough, the entire couch was covered 100%.
The homeowner was so happy.
Her name is Linda.
She got a brand new couch.
It's already in, hassle free.
And she's already back to renting,
Speaker 2: you know, that's a great situation that talks
to the value of the program.
The contents protection is up to 25, 000 of total coverage.
There is a 5, 000 limit for any one item.
You said she just renovated the home too.
So it was like six months old.
And now all of a sudden you're thinking you're gonna have to
come out of pocket for that.
And the property manager was able to file a claim.
Get it reimbursed quickly and replace that sofa.
I mean, it's just a value of the program and what it's meant to do, which is
protect the contents of the unit.
Speaker: Yeah.
So for number five, we have bed bug coverage,
Speaker 2: our favorite thing.
Yes, you know, nobody likes to talk about bed bugs and they can
certainly be a reputational risk with reviews and things of that nature.
The cool thing about this program is that there's 15, 000 of bed bug protection.
And what that does is it allows the Costco property manager to act quickly,
get the exterminators out there and remove the bed bugs first and foremost.
Also, put the guest up into another accommodation, and then, you
know, get the exterminators out there, get rid of the bed bugs.
Then they're going to replace the soft furnishings that were impacted, and
then they're going to be able to, if the next rental is impacted, after 72
hours and the home is still down, being treated for the bed bug situation,
and not ready to rent again, then they can also start claiming lost revenue.
Speaker: Such an important program.
You know, we've had some bed bugs happen over the years.
And it can be devastating.
Speaker 2: It really can.
Speaker: Yeah.
By the way, are you itchy right now talking about bedbugs?
You
Speaker 2: know, I start to squirm a little bit.
Did you see me squirming in my chair?
Speaker: Yeah, I was, I felt like I needed to scratch my hair
every time you said bedbugs.
It's not good.
It has a creepy feeling.
Yeah.
Do you know the number one way that bedbugs come into homes?
Speaker 2: You know, I was going to, and I typically say that it's, uh, somebody
stopped off at a hotel somewhere and they were brought to them in a suitcase.
Speaker: Yeah.
Speaker 2: Yeah.
Speaker: Yeah, I mean they travel through suitcases and things like that, but the
number one way that bed bugs come to our homes, to include vacation homes,
Speaker 2: is
Speaker: through
Speaker 2: the grocery store.
That boggles my mind.
Speaker: Yeah.
Fruit.
Yeah.
The reason why bed bugs exploded again was because they changed
the law about pesticides.
And so they reemerged when they changed the laws.
So that's why we have this bed bugs again, because growing
up, I'd never seen it, but I
Speaker 2: had never seen a bed bug myself either.
Like a myth.
Yeah.
Are they real?
Are they not real?
Speaker: Yeah.
Speaker 2: Trust me.
If you get them, they're real.
Oh man.
Speaker: So for number six, I didn't quite understand what you meant by this.
So I'm going to ask you to help explain it better.
Secondary coverage.
Speaker 2: So that pertains to if the homeowner has a commercial grade
coverage already in place, then this program would back it up and be a
secondary coverage to be able to provide additional coverage for if the limit
was exhausted on the first coverage or there was a claim that was over the
amount and this coverage would kick in.
What's great about this program is, is that it can also act as a primary
coverage if the homeowner keeps their traditional homeowner's policy.
Of course, that typically would not cover commercial rental activities, but because
this program is, is available through the Costco property manager, they are
additionally insured as a homeowner and they can use this from the time the guest
checks in to the time the guest checks out, which is when they need the coverage.
Otherwise it's.
It's the traditional homeowners policy would be in place for, you know, when
they use it or whatever the case might be.
But when the commercial rental is in there, check in, check out
the right coverage is in place.
Speaker: It's so important.
You know, I can't tell you how many times I've always wondered, you know,
will my insurance cover me on this?
And a lot of.
insurance policies for residential, even if you change it over to letting them know
that this is a vacation rental, there's always that question in the back of your
mind, how are they going to play this out?
And it's fantastic to have this secondary coverage with a product
that's specifically designed for the short term rental industry negotiated
by Costco to have this coverage in case your own insurance company doesn't
cover it, or the coverage is exhausted, or if it's something out of the norm
that Your normal insurance company wouldn't know how or want to cover.
Speaker 2: Yeah, that's such a great way to be able to talk about
the program is, is that it was created specifically for this niche.
And in that, it is something that is unlike anything else.
It's not going to cover anything, but Guests checking in to a vacation or
short term rental and from the time they check in to the time they check out the
specific coverage that's needed to cover against the risks and the perils that can
come from renting a home as a business.
This is there to take care of that.
Speaker: Yeah, there's only really a charge when guests are actually
in the property, not in between.
And that brings us up to number seven, that the.
Policies are a per booking policy, and maybe you can explain what that means.
Speaker 2: Sure, so traditional, either commercial coverage or something
of that nature will be per year.
And many times, if a homeowner has tried to go and buy a commercial coverage for
specifically short term vacation rentals, they've seen how expensive it can be.
I used to say three to four times, I was told that the most recent show
that I was at In Boise, Idaho that somebody was quoted up to 10 times as
much as they would normally pay for a traditional homeowners policy That's
a lot of money and it's per year.
And so you basically whether you rent your home 25 of the time or 30 or 50 or
70 you're basically paying for an entire year With no break given for the time
that it's not rented with our program.
It's per booking So there's two things that are super important to know
number one You You're only paying for the time that you're using it.
And number two, it's not a million dollars in liability per year.
It's a million dollars per booking, which means guest number one files a lawsuit.
There's a million dollars to cover that.
Guest number two causes a kitchen fire.
There's a million dollars for that.
are astronomical numbers when you think about it, because you go
from say 1 million, 2 million, 3 million, maybe per year to a million
per booking to cover those things.
It just means that you have literally protection when you need it most and
you're only paying for what you use.
Speaker: Yeah.
It's perfectly designed for what we're doing here.
And I'm really proud to be offering this to our homeowners because it's
important that if our homeowners are here to rent and earn income from
this to minimize those liabilities that are coming towards them, right?
Speaker 2: You don't know what you don't know until one comes along and those
things can be very, very, very expensive.
So a program like this serves that need and protects you when you need it most.
Steve: John, our last one, number eight, exclusive to Costco.
Speaker 2: So basically what that means is we only work with.
professional property managers.
And this program was created for Costco property managers to
then be able to deliver to their homeowners as additionally insured.
And what that means is that if a homeowner were to try to call us directly, we aren't
able to work with them and there would not be a program available to them like this.
So the value is, is that when you work with a Costco property manager, you
get access to this amazing program.
There's no paperwork to fill out.
There's nothing that you need to do other than to say yes
to a Costco property manager.
And even this is something that we didn't cover.
Let's say for instance, You're in a neighborhood or a town that needs a permit
and you have to show liability coverage.
We can also then, because of this program, provide that form to be able
to send that into that entity to be able to get that permit taken care of.
So because you work with Costco, you get access to this program
and it's just second to none.
Speaker: John, thanks so much for coming on.
I really appreciate your time and I know our homeowners will appreciate it.
You're always so much fun to talk to.
Really enjoy it.
Speaker 2: Appreciate that.
Speaker: Thanks again.
Speaker 2: Yeah.
My pleasure.