Hotel insurance calculator: what your premium costs in RevPAR.
Insurance is a fixed charge. It sits below gross operating profit, so no amount of departmental performance moves it — it comes straight out of EBITDA and capitalizes into value. Put your numbers in and see it in the units you already run the hotel in.
- Insurance per available room, per key, and per occupied night
- The ADR or occupancy move that offsets a renewal
- Value and value per key at your cap rate
- DSCR, break-even occupancy, and business income adequacy
No email required to see your results. Nothing is transmitted until you ask.
Step one
Your hotel
Seven numbers off your last STR report and operating statement. It all runs in your browser, with no account. Nothing leaves your browser until you click Email this result or ask for a review further down.
Prefilled with an example hotel, not a benchmark. and enter yours.
Step two — optional: debt, break-even, and business income
Every field here is optional and each one unlocks a section below. Leave anything blank and that section simply doesn't appear.
Per available room
What insurance costs in RevPAR
Hotels price everything per available room, so that is where a premium belongs too. Your rooms sell 65,700 nights a year whether or not anyone stays in them, and the premium is spread across every one of them.
RevPAR
$151.20
$210.00 ADR × 72% occupancy
Insurance per available room
$6.39
$420K ÷ 65,700 room nights
Insurance per key
$2,333
Per key, per year
% of total revenue
3.20%
$13.1M total revenue
Read it this way
4.2% of RevPAR
Of the $151.20 of RevPAR you earn, $6.39 goes to insurance before anything else does. Put differently: your rate has to clear $8.88 on every occupied room night just to pay the premium — and under USALI that charge sits below gross operating profit, so no amount of departmental performance moves it.
Total revenue
$13.1M
$199.91 TRevPAR
EBITDA
$3.33M
Total revenue − operating expenses
Value at your cap
$39.2M
EBITDA ÷ 8.5%
Value per key
$218K
180 keys
Illustrative estimate only, based solely on the numbers you entered. This is not a quote, rate indication, coverage recommendation, or offer of insurance. Actual premiums, deductibles, and settlements depend on underwriting and policy wording.
The renewal
What a premium move is worth
Insurance is a fixed charge, so a premium change moves EBITDA dollar for dollar and capitalizes into value. Drag the slider to whatever your renewal is doing.
New premium
$483,000
+$63,000 against today
Value created or destroyed
-$741K
-$63,000 of EBITDA ÷ 8.5%
Per key
-$4,118
Value change ÷ keys
New EBITDA
$3.27M
From $3.33M
To hold EBITDA flat on rate
+$1.33 of ADR
That is the whole premium change spread over 47,304 occupied room nights. Against an ADR of $210.00 it is a 0.6% move in rate — worth knowing before you decide the renewal is survivable.
Or on occupancy
+0.46 points
At full flow-through, which overstates the case — every occupied room costs something to sell. Add a variable cost per occupied room in step two for the real number.
Value change by premium move and exit cap
| Premium | 8.0% cap | 8.5% cap | 9.0% cap | 9.5% cap |
|---|---|---|---|---|
| -20% | +$1.05M | +$988K | +$933K | +$884K |
| -10% | +$525K | +$494K | +$467K | +$442K |
| 0% | — | — | — | — |
| +10% | -$525K | -$494K | -$467K | -$442K |
| +20% | -$1.05M | -$988K | -$933K | -$884K |
Every dollar of annual premium carries $11.76 of asset value at an 8.5% cap. Your current premium is $4.94M of capitalized expense.
Where it bites
Leverage, operating leverage, and the loss you don't budget for
Three things a premium touches that the premium line doesn't show: your covenant, the occupancy you need to break even, and whether business income actually funds a closure.
DSCR
Add annual debt service in step two to see your coverage today, at this renewal, and the exact premium increase that drops you to your covenant.
Break-even occupancy
Add a variable cost per occupied room in step two — housekeeping, amenities, commissions — to see the occupancy that covers your fixed block, insurance included.
Business income
Add your business income limit and indemnity period in step two to see how much of a closure the policy actually funds.
Seasonality
Add your business income limit, indemnity period, and the share of revenue you earn in peak months. Most limits are sized on an average month — but a hurricane doesn't pick an average month.
Keep this
Take it to the owner's meeting.
Print it, or copy the link, which reopens this page with every input filled in. Or have the RevPAR, per-key and percent-of-revenue figures emailed to you.
The one line on a hotel P&L that operations can't fix
Almost everything on a hotel operating statement responds to how well the hotel is run. Rooms profit moves with rate and mix. F&B moves with covers and cost of sales. Labor moves with scheduling. Insurance does none of that. Under the Uniform System of Accounts it is a fixed charge, booked below gross operating profit alongside property taxes and ground rent, which means a general manager can run a flawless year and the premium lands exactly where the carrier put it.
That placement is also what makes a renewal an asset-value event. Because insurance sits below GOP, every dollar of it comes out of EBITDA, and EBITDA is what a buyer capitalizes. At an 8.5% cap, a dollar of annual premium carries about $11.76 of asset value — so a $60,000 increase is roughly $706,000 off the next appraisal. Owners price that increase in cash and get the right answer. Priced against value, it is frequently the largest single move available on the asset that year.
The useful reframe is per available room. Your hotel sells the same room count every night whether anyone stays or not, so spreading the premium across available room nights puts it directly alongside RevPAR — the number you already manage to. A 180-key hotel paying $420,000 is carrying about $6.39 of insurance per available room night against $151 of RevPAR. Stated that way, the renewal question stops being a budget line and starts being a pricing decision: at 72% occupancy, an $84,000 increase is $1.78 of ADR.
No property type got repriced harder. Hospitality sits at the intersection of two hard markets at once — catastrophe property for coastal and resort assets, and premises liability at a moment when hotel verdicts routinely clear eight figures, with pools, bars, banquets, and assault-and-battery exposure all underwritten separately. Meanwhile the flag dictates limits in the franchise agreement, so the program has to satisfy the brand before it can be shopped on price.
The calculator above also sizes the parts that never appear in the premium: the occupancy you need to cover a fixed block that insurance is inside of, the DSCR headroom a premium increase consumes, and whether business income actually funds a closure. That last one is where hospitality differs most from every other asset class. Business income limits get sized on an average month, and a hurricane does not arrive in an average month — a resort earning 42% of its revenue in three months burns through the same limit far faster if the closure starts at the top of the season.
Hotel portfolios with steady workers' comp and liability losses sometimes look at a captive. Our captive insurance calculator and the guide to real estate captive insurance show who it fits.
For context on the renewal itself, the commercial insurance rate barometer tracks where property and liability pricing is moving. Coastal properties face a separate set of wind and named storm terms, covered in catastrophe and coastal property insurance.
Common questions
How much does hotel insurance cost per key?
Insurance cost per key per year is the figure hotel owners, brands, and buyers all quote, and it moved sharply between 2019 and 2024 as catastrophe and hospitality liability capacity contracted. The right number depends on construction, roof age, coastal exposure, F&B and liquor operations, pool and amenity risk, brand tier, and loss history, so a single national average is close to useless. What matters more is whether your number moved because the market moved or because the program stopped being marketed.
What percentage of hotel revenue should insurance be?
Insurance is tracked as a percentage of total revenue under the Uniform System of Accounts for the Lodging Industry, alongside property taxes and ground rent in fixed charges. Historically it ran well under 2% of total revenue for most full-service assets; coastal and older properties have seen it push several times higher. Comparing your own figure across years is more useful than comparing it to a national average, because the drivers are so property-specific.
How does insurance affect hotel EBITDA and value?
Insurance is a fixed charge, which means it sits below gross operating profit in the USALI structure — no amount of departmental performance moves it. Every dollar of premium comes straight out of EBITDA, and EBITDA capitalizes. At an 8.5% cap rate, a dollar of annual premium carries about $11.76 of asset value, so a $60,000 renewal increase is roughly $706,000 of value destroyed on the next appraisal, refinance, or sale.
How much do I need to raise ADR to cover an insurance increase?
Divide the premium increase by your occupied room nights. On a 180-key hotel running 72% occupancy — about 47,300 occupied room nights a year — an $84,000 premium increase takes $1.78 of ADR to offset. That is useful precisely because it is small enough to sound manageable and large enough to be a real pricing decision in a competitive set.
How much business income coverage does a hotel need?
Enough to carry total revenue, not just rooms revenue, for however long the property is out of service — and hotel rebuilds run long. A closure takes F&B, banquet, parking, and spa revenue down with the rooms, and business income responds to lost income plus continuing expenses. The common failure is sizing the limit on an average month when the indemnity period is the part that actually runs short.
Why does seasonality matter for hotel business interruption?
Because limits get sized on an average month and storms do not arrive in an average month. A resort earning 42% of its revenue in three peak months earns about 1.68 times as much in one of those months as in an average one, so a closure starting at the top of the season burns through the limit far faster than the arithmetic suggests. The same limit that funds eight months of an average-month closure may fund only seven of a peak-season one.
How does insurance affect a hotel loan covenant?
Premium comes out of EBITDA, and DSCR is EBITDA over annual debt service, so a premium increase lowers coverage directly. Hotel loans commonly carry tighter covenants than other commercial real estate because revenue reprices nightly, and hotel NOI swings with RevPAR — so covenant headroom that looks comfortable in a strong year is the first thing a soft one takes. The calculator above solves for the exact premium increase that drops you to your covenant.
Coastal or hail-belt hotel?
A percentage wind deductible applies to each affected location's insured value, so one storm applies several. Size what you actually retain.
Wind & hail deductible calculatorLooking for the program, not the math?
Property, guest and premises liability, liquor, and brand-required umbrella towers for flagged and independent hotels.
Hospitality & hotel insuranceIs your limit still enough?
A coinsurance clause cuts every claim, not just a total loss, when the limit trails replacement cost. Price the penalty on your own loss.
Coinsurance penalty calculatorFree renewal review
Have someone read the program behind these numbers
The calculator prices the premium. It can't tell you whether that premium is right for the risk — that takes your loss runs, your STR report, your franchise requirements, and what hospitality capacity is charging accounts like yours this quarter. Send the program over, or just the renewal date.
- A second set of expert eyes on your program, free.
- Marketed to the carriers that actually want your risk.
- No obligation, fully confidential.
Book 20 minutes or call (205) 999-4884