Secure your seasonal rental

The insurance of the client

So far everything is fairly simple but don’t let us forget that we are in France and something that seems straightforward at the start can rapidly become rather complicated! In fact, if you ask your insurance company the simple question, “What must I do?”, he will simply reply, “It’s not complicated: you just ask each client to produce a holiday extension certificate (“extension de villégiature” in French), which very often is one of the guarantees included in the client’s own comprehensive home insurance. This clause allows the client’s own comprehensive home insurance to function during his holiday in your property.”

In effect, this extension ensures your client for potential damage that he might cause to your property (water, fire and theft), or to that of your neighbours during his stay, by transferring certain guarantees (third party liability insurance) from the client’s principal dwelling to your property that he is renting on the Ile de Ré.

Following this principle, this special holiday extension certificate is the ideal solution. Nevertheless, this does not necessarily completely solve the problem, for at least three reasons:

Your furniture (in particular the linen-covered sofa I mentioned before), will only be covered by the insurance if the damage was caused by a specific event such as a fire or water leak. But the greasy chocolate stain which the dear little child might have left when eating a pain au chocalat on the sofa, will not be covered.
Despite what some insurance companies might say, it isn’t always easy to ask each client for a valid holiday extension certificate, as some clients do not understand that your property must be insured by them and not just by you, the owner. This is particularly true for luxury rentals.
Lastly, if for example, you have Russian or Chinese clients, and there will likely be more of these in future, it is up to you to explain in English why in France they must produce a holiday extension certificate and, should they produce this document on arrival, it is up to you to check that it is valid and that all risks are covered.

Another solution would be to ask the client to take out a specific insurance for this type of stay (holiday insurance), which would then include a third party liability clause for accidental damage caused to any furnishings and fittings such as the linen sofa, as well as to parts of the actual building, all of which belong to the owner of the property. This guarantee very often contains a maximum claim limit and an excess, which you should check. It is important to note that this insurance must remain optional and can never be imposed on the client nor be included nor hidden in the rental price.

Owners’ insurance

While, as an owner who is not occupying the property which you are renting out on the Ile de Ré, you are not legally obliged to take out any insurance, you must then tell the client that he is obliged to insure the property during his stay and you should make this a term of the rental agreement. In the case of short seasonal lets, it is dangerous to do this for all the above reasons, and equally because from time to time, you might wish to occupy the property yourself, especially if it is also your second home on the Ile de Ré.

The advice then is to take the initiative as owner and insure your own property on the client’s behalf by taking out a specific third party guarantee (“pour le compte de qui il appartiendra”). This guarantee will cover all persons who occupy your property against rental risks (water, fire and explosive damage) to you, your neighbours and third parties.

Another solution would be to take out a guarantee waiving liability (“abandon de recours”), which will cover damage caused in your property on the Ile de Ré, but won’t cover damage to your neighbours or to third parties. In this case, you must check that your client’s third party liability insurance can pick up the slack – as you can see, this type of solution is quite complex.

The bad news is that certain insurance companies, very often the mutual ones, do not offer these two types of guarantee, so you would have to change your insurance provider.

Practical solutions

So for your linen sofa with the greasy chocolate stain, there is a lot to think about.

The breakage deposit is an essential element in making the client accountable for his actions during his stay and works well if you are able to prove his liability. If the client is not entirely honest and insists that the stain was there when he arrived, it will be difficult for you to prove the contrary unless you have taken detailed photos of all your furniture vouching for its state before his arrival.
In every case, the golden rule is to assess any damage immediately upon the client’s departure, particularly if your bookings follow on from each other, which very often happens during the tourist season on the Ile de Ré.

Risks are undoubtedly par for the course in the business of seasonal holiday letting and no insurance can cover them 100%. A property on the Ile de Ré rented out for 20 or 25 weeks of the year will most certainly wear out more quickly than one that remains closed up for most of the time, or is exclusively occupied by the owner.

As in all business ventures, turnover does not equal profit. 5% should be set aside to take into account these rental risks in order to replace an object if necessary or to repair some damage.

Let us be practical and remember that prevention is better than cure. For your sofa, covered in expensive linen, in case of accidents, cover it instead with material that is easy to wash or replace. This will be simpler than conducting an expensive law suit with your client or your insurance company.

Be well aware of the risks associated with renting. You must have a good insurance contract but also, above all, you must organize your property so that it is adapted to being used as a holiday let and can be used easily by the client during his stay. Explain to him when he arrives how to look after the property and show him how to use the equipment. Tell him that someone is there to help if there is a problem or if something doesn’t work properly. He has only to phone for assistance. Also someone will be there when he leaves.

It is the job of Bon Séjour en France to advise, to rent out, to take care of your property and to guarantee the satisfaction of your clients.

Didier Pélétengeas – Managing Director, Bon Séjour en France