Running a motel in Australia comes with unique challenges. Between maintaining property, managing staff, and ensuring guest satisfaction, there’s a lot to juggle — and one of the most important considerations is protecting your investment with the right insurance. Motel insurance provides financial protection against risks such as property damage, theft, liability claims, and business interruption. But how much does motel insurance cost in Australia? The answer depends on several factors, including your property size, location, and the types of coverage you choose. In this article, we’ll break down the average costs, the main factors that influence premiums, and how you can find the best insurance policy for your motel business.
Understanding Motel Insurance
Motel insurance is a form of business insurance tailored to the accommodation industry. It’s designed to protect motels from common risks such as fire, storm damage, theft, guest injuries, or even temporary closure due to an insured event.
Most motel insurance policies include a combination of:
- Commercial property insurance – Covers buildings, contents, and fixtures against damage or loss.
- Public liability insurance – Protects you against claims if a guest, supplier, or visitor is injured or suffers property damage at your motel.
- Business interruption insurance – Covers lost income if your motel can’t operate after an insured event like a fire or flood.
- Management liability – Provides coverage for claims of wrongful acts against business managers or directors.
- Equipment and contents insurance – Covers appliances, furniture, and fixtures that are essential to motel operations.
What’s the Average Cost of Motel Insurance in Australia?
While there’s no one-size-fits-all answer, most small to mid-sized motels in Australia can expect to pay between $4,000 and $10,000 per year for comprehensive insurance coverage. However, this figure can vary significantly depending on several risk factors.
For example, a small regional motel with limited amenities and fewer than 20 rooms may pay around $3,000 to $5,000 annually, while a larger coastal property with a restaurant, pool, and bar may pay $10,000 or more.
To give you an idea of how costs can vary, here’s a rough breakdown:
Motel Type | Approximate Annual Premium (AUD) |
Small regional motel (10–20 rooms) | $3,000 – $5,000 |
Medium-sized motel (20–40 rooms) | $5,000 – $8,000 |
Large city or resort-style motel (40+ rooms) | $8,000 – $12,000+ |
These figures are estimates and should only be used as a guide. Your exact premium will depend on the specific circumstances of your property and business operations.
Key Factors That Influence Motel Insurance Costs
Several factors impact how much you’ll pay for motel insurance. Understanding these can help you manage your risks and secure more competitive premiums.
1. Location
Where your motel is located plays a major role in determining insurance costs. Properties in high-risk areas — such as flood-prone regions, bushfire zones, or coastal locations vulnerable to storms — often attract higher premiums.
For instance, a motel in Far North Queensland may face higher insurance costs due to cyclone exposure, compared to one in a low-risk inland area.
2. Property Size and Value
The larger and more valuable your property, the higher your insurance cost. This includes not only the building itself but also the value of your contents, such as furniture, appliances, and electronics.
3. Facilities and Amenities
The larger and more valuable your property, the higher your insurance cost. This includes not only the building itself but also the value of your contents, such as furniture, appliances, and electronics.
4. Claims History
Your claims history directly affects your insurance cost. If you’ve made frequent or large claims in the past, insurers may view your business as higher risk and increase your premiums accordingly. Maintaining a clean claims record can lead to lower rates over time.
5. Coverage Type and Limits
The broader your coverage, the more you’ll pay. For example, including business interruption and management liability coverage will increase your premium, but it also offers far greater financial protection in the event of a serious incident.
Similarly, choosing higher coverage limits means you’ll pay more, but it ensures your motel can recover fully after a loss.
6. Security and Safety Measures
Insurers often reward businesses that actively reduce risk. Installing CCTV cameras, fire detection systems, and secure access controls can help lower your premium. Demonstrating a commitment to guest safety and property protection makes you a more attractive client to insurers.
What Does Motel Insurance Typically Cover?
A well-rounded motel insurance policy provides protection for a variety of situations, including:
- Fire and storm damage – Covers repair or replacement of buildings, rooms, and structures.
- Theft and vandalism – Covers stolen or damaged items, including furnishings, electronics, and cash.
- Accidental damage – Protects against unexpected incidents that cause property loss.
- Business interruption – Compensates for lost revenue if your motel must close temporarily.
- Public and product liability – Covers guest injuries or property damage claims.
- Equipment breakdown – Covers mechanical failure of essential systems such as air conditioning, refrigeration, or laundry equipment.
Depending on your insurer, you can also add optional extras such as cyber liability insurance (for data breaches and online bookings), workers’ compensation, and vehicle insurance for company cars or courtesy vehicles.
How to Reduce Your Motel Insurance Costs
Even though motel insurance can be expensive, there are several ways to manage costs without sacrificing essential coverage:
- Bundle your policies – Combining property, liability, and business interruption under one insurer often reduces overall premiums.
- Improve risk management – Implementing safety and security measures can help lower risk-based premiums.
- Increase your excess – Opting for a higher excess (the amount you pay when making a claim) can reduce your premium.
- Review your policy annually – As your business evolves, make sure your coverage still matches your needs. Adjusting unnecessary add-ons can save money.
- Work with a specialist broker – Insurance brokers who understand the hospitality industry can negotiate better deals and tailor coverage for motels.
Conclusion
While the cost of motel insurance in Australia varies depending on your location, property size, and coverage options, it’s a crucial investment for any motel owner. On average, most motels can expect to pay between $4,000 and $10,000 per year for comprehensive protection — a small price compared to the potential financial losses of an uninsured event.
By understanding what drives insurance costs and working with the right insurer or broker, you can secure affordable, tailored coverage that keeps your motel protected and thriving for years to come.
👉 Ready to safeguard your hotel?
Contact Commercial Property Cover today for a personalised quote and expert advice tailored to your business.
