Hotel & Motel Insurance Insurance: Average Premiums & Pricing Factors
Quick Answer
How much does Hotel & Motel Insurance cost? Average premiums by business size, industry, and state — plus the key factors that drive your rate up or down.
Comprehensive FAQ, cost guide, and claims examples for hotel and motel insurance — property, liability, liquor, crime, and business income coverage for hotels, motels, and extended-stay properties.
What You Need to Know
Hotel and motel insurance covers property, general liability, liquor liability, crime, and business income for hotels, motels, and extended-stay properties. It protects against guest injuries, property damage, food-borne illness, and revenue loss from covered closures.
Hotel & Motel Insurance Cost by Business Size
| Business Size | Annual Revenue | Typical Premium | Notes |
|---|---|---|---|
| Small Motel (20–40 rooms) | $500K–$1.5M | $8,000–$15,000/yr | Basic property and liability. No restaurant or bar. |
| Mid-Size Hotel (60–120 rooms) | $2M–$8M | $15,000–$35,000/yr | May include restaurant, pool, or limited bar service. |
| Full-Service Hotel (150+ rooms) | $10M+ | $35,000–$80,000/yr | Restaurant, bar, pool, spa, and meeting facilities. |
| Resort / Franchise Property | $25M+ | $75,000–$200,000+/yr | Comprehensive coverage with amenities and brand requirements. |
What Determines Your Premium?
- Building Replacement Cost (High impact) — The total replacement cost of the building, including contents, drives the largest portion of premium. A 100-room motel at $150/ft replacement cost vs. a boutique hotel at $300/ft makes a significant difference.
- Food and Beverage Operations (High impact) — Hotels with restaurants, bars, room service, or catering face higher liability from food-borne illness and liquor liability. Alcohol service requires a separate liquor liability policy.
- Pool and Spa Facilities (High impact) — Pools, spas, and recreational facilities significantly increase premises liability exposure. Proper fencing, signage, lifeguards, and maintenance are required by most carriers.
- Annual Revenue and Occupancy (High impact) — Business income coverage limits are based on actual revenue and occupancy rates. Higher-revenue properties need higher BI limits.
- Prior Claims History (Medium impact) — Hotels with slip-and-fall, crime, or pool claims see premium increases of 20–50% or difficulty placing coverage.
- Location (Medium impact) — Urban and tourist corridor properties face higher liability than rural locations. California properties pay 20–40% more than national averages due to higher litigation costs.