Self-insured retention (SIR)
A self-insured retention is the amount of loss a business agrees to handle itself before its insurer becomes involved. It resembles a deductible, but with a deductible the insurer manages the claim from the start; with an SIR the insured manages and pays claims until the retention is reached.
By Andrew Bate, Co-founderReviewed by Stuart BateUpdated
Why this matters for property managers
The retention is the core design choice in a damage program. Set it where guest damage is predictable and the manager keeps the economics of self-insuring — funded by waiver revenue — while insurance covers the volatile layer above. A 10-home operator might retain a few thousand dollars; a 200-home operator can retain far more and buy insurance only for genuinely bad months.
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Self-insured retention (SIR): common questions
How is a self-insured retention different from a deductible?
With a deductible the insurer adjusts the claim and bills you for your share. With an SIR you adjust and pay claims yourself up to the retention, and the insurer responds only above it. SIRs are common in programs where the insured has the data to handle routine losses efficiently.
Who chooses the retention in a Velaris program?
The property manager, with Velaris modeling the options against actual damage history and portfolio size. The retention is funded from guest-fee revenue held in the manager's own escrow account.
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