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5674 Views 15 Replies Latest reply: Sep 24, 2013 11:45 AM by tomcathollow RSS
jmather Contributor 31 posts since
Jun 1, 2012
Currently Being Moderated

Jun 22, 2012 6:17 PM

Security deposit vs HA damage insurance?

What seems to work out best - charging a security deposit or HomeAway's damage insurance option? Right now, we're just charge $100 security deposit against damages. When filling out a quote, I've seen the insurance option but never offered it. Should I? I found some past discussions on this subject but they were all over 1 1/2 years ago so not sure how valid they are. Anyone had any experiences having to file a complaint for the insurance?

 

Also, I read somewhere about trip refund insurance that we can offer to protect guests should they book with us, then have to cancel and lose all or a portion of their booking fees. Is this a viable option?

 

Thanks, Jim

  • mike-dfv Community All-Star 827 posts since
    Mar 5, 2011
    Currently Being Moderated
    Jun 24, 2012 8:59 AM (in response to jmather)
    Re: Security deposit vs HA damage insurance?

    This has been discussed a lot so you can use the search feature and get tons of information. Here's what I do and it works very well for me. I give my guests an option, either a $250 Refundable Security Deposit (fully refundable based on damages) or a $50 Damage Waiver Fee (not refundable, like buying insurance). More and more, my guests are choosing the Damage Waiver Fee. The beauty of this is that it's money in my pocket, pending any damages. Why should the insurance company get that money.

     

    The downside, of course, is that damages could exceed more than $50 and then the repair money is out of my pocket. But here's the thing, with very few exceptions, guests have taken great care of my property, so I've never had to withhold money from a Refundable Security Deposit anyway. Even better, now that I've had well over five guests choose the Damage Waiver Fee, I've collected much more than the Refundable Security Deposit I would get from a guest anyway.

     

    Now, if your guests regularly damage your property such that you're often withholding some of the Refundable Security Deposit, then this won't work. It is a risk, but as I've said, once you get enough guests choosing it, then you more than cover a Refundable Security Deposit anyway. I have even used this money to replace items, such as damaged or missing towels, that wouldn't normally be withheld from a Security Deposit as it's "normal wear and tear".

     

    Mike

  • New Member 2 posts since
    Jul 19, 2012
    Currently Being Moderated
    Jul 19, 2012 10:02 AM (in response to jmather)
    Re: Security deposit vs HA damage insurance?

    The HA damage insurance is a scam, they delay claims for weeks for simple damage of less than $300 and quick to deny larger claims using a bogus reason of renter abuse and voilation of rental agreement as the basis for denial.

     

    Please protect yourself by requesting deposits from your rental guests because people will take care of your property if they have some money on deposit that they can potentially lose.

     

    The travel insurance company is the biggest scam in the history of vacation rental

    • sage Community All-Star 966 posts since
      Jul 4, 2012
      Currently Being Moderated
      Feb 16, 2013 1:33 PM (in response to lajunta)
      Re: Security deposit vs HA damage insurance?

      I must disagree with the characterization of the CSA insurance as a scam.  By all indications, it is and does what it says it is and does.  The problem is that people do not understand what it is and does because they either do not read, or do not understand, the coverage.  To see the coverage, look at http://www.propertydamageprotection.com/pdf/100HADoc.pdf.

       

      Some important points to understand:

       

      Under definitions, notice that no where  is the owner of the property included in the definition of an insured.  This protection is for the benefit of the traveler, not the owner.

      INSURED means the person named on the application form, for whom the required premium payment is received and a Trip is scheduled and any eligible Traveling Companions who share the same Accommodation with the person enrolled and for whom the required premium payment is received.

       

      So how can HA say "CSA Property Damage Protection helps owners and property managers protect their vacation rentals from accidental damage without requiring a damage deposit" with a straight face?  Here is the pertinent portion:

      VACATION RENTAL DAMAGE COVERAGE

      If you occupy an Accommodation and you damage the real or personal property assigned to that Accommodation during the Trip, we will reimburse you the lesser of the cost of repairs or the Actual Cash Value of the property, up to the amount shown in the Schedule. Coverage is provided to you and all travelers under the Accommodation reservation during the Trip provided you are listed on the lease agreement.

       

      Coverage is not provided for loss due to:

        a. inclement weather or natural disaster;

        b. your intentional acts or gross negligence;

        c. normal wear and tear of the real or personal property assigned to the Accommodation;

        d. any damage that occurs if you are in violation of the lease agreement;

        e. loss, theft or damage to any personal effects owned by you or brought on the covered Trip by you;

        f. loss, theft or damage caused by any person other than you or your traveling companions with whom you share the Accommodation reservation unless substantiated by a police report.

      As that shows, the coverage does not protect the owner from damage by the traveler, rather it protects the traveler from certain claims by the owner.  When it comes to damage to the property, notice that there is no coverage for "intentional acts or gross negligence; . . . normal wear and tear."  So what does that leave?  Do you see coverage for any damage except that resulting from simple negligence?  I don't know about you, but I never would consider charging a guest for normal wear and tear, and events constituting simple negligence I am likely to overlook--say a guest drops a couple wine glasses and they break.  It is the cost to replair damage from intentional acts or what would constitute gross negligence--something like horseplay by the guests that knocks the dining table through a window--that I am likely to want to recover from a guest, and that is excluded from coverage.

       

      The CSA coverage may be worthwhile for travelers--the vacation rental damage coverage is only a very small part of the policy.  But for owners?

       

      Part of the problem I see with this is that by offering the CSA insurance to travelers an owner may lead the traveler to understand that by purchasing this insurance the traveler will be off the hook for any damage claims.  So if my guests do smash the dining table while wrestling, I may be barred from billing them for that damage unless I can show that in the contract they agreed to pay for all damage regardless of the CSA coverage.  I do not say that owners should not use this, just that owners need to understand the coverage and limits.

      • artemisia New Member 13 posts since
        Aug 22, 2013
        Currently Being Moderated
        Aug 22, 2013 7:13 PM (in response to sage)
        Re: Security deposit vs HA damage insurance?

        Agreed. When I read the policy it was clear to me that the insurance was to protect the renter and not the owner. If renters want to buy their own travel protection insurance that is fine by me but I will continue to collect a refundable damage deposit to help cover my risk.

    • artemisia New Member 13 posts since
      Aug 22, 2013
      Currently Being Moderated
      Aug 22, 2013 7:06 PM (in response to lajunta)
      Re: Security deposit vs HA damage insurance?

      I'm so glad you posted your experience. When I read over the information provided by the insurance company I saw very little about how the owner would make a claim. I've been successful in collecting a $300 deposit (up to $500 if they bring pets). So far guests have taken great care of my property. The only things broken or missing have been very minor. I'm still new - just started renting last autumn.

  • New Member 2 posts since
    Jul 19, 2012
    Currently Being Moderated
    Feb 16, 2013 3:53 PM (in response to jmather)
    Re: Security deposit vs HA damage insurance?

    Sage listen to me The CSA insurance is a big scam plain and simple, why mess around with legalese when you collect the deposit upfront? Anyone willing to rent your property should have security deposit before renting, if they don't you shouldn't be renting to them because they can't afford your property to start with. I allow the guests to use their credit cards through vacation rent payment service, this has work great.

     

    Please home owners listen to my advice don't waste your hard earned funds on some scam insurance that won't pay up or use delaying tactics to settle claim.

     

    It costs the guests a little processing fee to Vacation Rent Payment for the credit card deposit. The guests will be very careful by constantly informing their invitees that they shouldn't damage any of the home owner's furniture, appliances etc.

     

    This hasn't slowed down our rental business since we implimented this procedure. We are a living proof of the CSA insurance program abuse, dont use them they are criminals.

     

    Plain and simple CSA INSURANCE IS  FRAUD...... SCAM ....... Criminals

     

     

    Stop using them

  • ttaylor0 Active Contributor 425 posts since
    Apr 1, 2011
    Currently Being Moderated
    Feb 16, 2013 8:04 PM (in response to jmather)
    Re: Security deposit vs HA damage insurance?

    A lot of negative concerning CSA,  any positive information. I have used them several times, but I have been very lucky and never had to file a claim. Could someone speak up who has used them and they came through for you as you thought they should.  With all this talk about denying claims, I am wondering if I am throwing away my money or not.

    • hkquinn Active Contributor 341 posts since
      Jul 22, 2012
      Currently Being Moderated
      Feb 17, 2013 9:52 AM (in response to ttaylor0)
      Re: Security deposit vs HA damage insurance?

      It's a very restrictive policy. I am in the insurance business and I won't use this policy and here's why:

       

      1.they pay ACTUAL CASH VALUE- meaning if your guest ruins your $4,000 leather sofa, but the sofa is 5 years old, they will despirciate the value and give you much less than it's worth,

      2.Under the general exclusions-

      you or your Traveling Companion being under the

      influence of drugs or intoxicants, (so if our drunk guests ruin your dining room table by dancing on it....not covered)

       

      3.Coverage is not provided for the following:

      a. inclement weather or natural disaster;

      b. your intentional acts or gross negligence;

      c. normal wear and tear of the real or personal

      property assigned to the Accommodation;

      d. any damage that occurs if you are in violation of

      the lease agreement; This is a big one! If our guests smoke, or overcrowd our home and do damage...not covered.

      e. loss, theft or damage to any personal effects

      owned by you or brought on the covered Trip by

      you;

      f. loss, theft or damage caused by any person other

      than you or your traveling companions with whom

      you share the Accommodation reservation unless

      substantiated by a police report.

       

      So basically what this policy will not protect owners are all the things owners want protection from: theft, destructive damage, and lease violations.

       

      As far as I can see the only thing of value it might actually cover is accidental breakage. I've gone back to a high refundable damage deposit. I have found I have a cleaner house when people feel they might lose their deposit.

  • artemisia New Member 13 posts since
    Aug 22, 2013
    Currently Being Moderated
    Aug 22, 2013 7:23 PM (in response to jmather)
    Re: Security deposit vs HA damage insurance?

    In looking at the answers I'm not seeing anything about your question about insurance to protect the traveler from cancellation. I see no harm in allowing VRBO to offer it to my guests. I've purchased that sort of insurance before for air travel and made one claim that was handled well - I forget the name of the insurance company.

     

    I have been successful in encouraging guests who have to cancel to reschedule. I offer them the same rate I offered for the original booking even if my rates have gone up in the meantime and they like that. If they don't reschedule I keep the measley $125 they put down to hold their reservation. They pay the balance within 15 days of check-in and I haven't had a cancellation yet after the full payment. Mycancellation policy is spelled out in my Rental Agreement so they know their level of risk. I'm always happy to work with people to be as fair as possible to everyone involved. Their money is as important to them as mine is to me, after all.

    But since most of our guests don't already know us and have reason to trust us there may be some nervous enough to purchase travel protection insurance, so why not make it available?

    • lrbaldwin Active Contributor 755 posts since
      Feb 16, 2011
      Currently Being Moderated
      Aug 23, 2013 6:40 AM (in response to artemisia)
      Re: Security deposit vs HA damage insurance?

      We require final payment to be made 60 days prior to guests' check-in date.  This way, if they cancel, odds are very good that we can find another renter and refund all but $100 admin fee.  This is good for the renter who cancels (gets most of his money back) and for us (plenty of time to re-rent) to keep everybody happy.  I would never allow final payment so close to check-in date, way too risky to fine a new renter.

       

      Linda 

  • tomcathollow New Member 2 posts since
    Sep 24, 2013
    Currently Being Moderated
    Sep 24, 2013 11:42 AM (in response to jmather)
    Re: Security deposit vs HA damage insurance?

    Hi, I will give you an instance to think about. I charged the guest the 49.00 fee for the insurance ($1500.00)in lieu of having to refund my petty $50 damage fee. The young couple left the property, my housekeeper went in and discovered that my microfiber sofa had been urinated on by someone OR something (think pet which is forbidden in our rental agreement) I had guests coming in within two days, the smell permeated the house, and the saturation was through the foam interior! I immediately contacted the insurance people, filled out my claim and gave the guest information that I had. I immediately trashed the sofa to the dump, contacted a furniture store and had a new one delivered sight unseen for a cost of $750.00. As requested, pictures had been taken of the damages, I called and inquired as to the guaranteed coverage that I assume I had as an owner. My damage refund was declined twice because "the guests violated my rental agreement by bringing a pet..." "therefore it is not coverable...".Perhaps someone could explain to me just what that insurance would cover because it sure does nothing to protect me. I should also state that I live 250 miles away from my rental and neither I nor my housekeeper greets the guests to see if they are pulling a fast one! We have a key pad and the entry code is changeable, we have everything ready, they just arrive after three PM. I would love to steer all of you away from the insurance because it is another way to nickle and dime your guests and you!!!!!!

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