I charge a $400 refundable damage deposit.  I have never had a problem with it.  On the 3 occasions where we had real damage over the past 3 years the renters called me immediately and clearly felt bad about the damage.  We worked out an appropriate fee to cover the damage.  In the end, the renter felt good about the amount I charged them.  I don't charge repeat guests the fee.

We require a $250 reservation / security deposit.

I have received the e-mail messages from HomeAway advertising the convenience of having the guests pay for Property Damage Protection, in lieu of charging and needing to refund a large security deposit.

Here's a link to the information.

http://www.propertydamageprotection.com/

I've looked into it, and thought about it,and it certainly looks tempting. 

BUT: I've decided to stick with our policy of collecting and refunding security deposits. 

Here are my thoughts.  I believe our guest apartment has been left in good shape after each guest is because of two reasons:

(1) the screening process, which helps us rent to people we can trust,

and

(2) the guest's feeling of "Oh, I better leave everything in good shape, because I want to get the full amount of my security deposit back."

I don't think people would be so conscientious about following all of the rules upon check-out (such as not leaving dirty dishes) if they didn't THINK that we might deduct money from the security deposit, for not complying.

I don't know why, but the psychological motivation for "wanting to get the full amount of their refund" is very high. I know that from my own experience, working so hard to get all the money back from my security deposit, upon moving out of various apartments I have lived in. 

So that's why (up to now), I've decided NOT to offer guests the option of buying damage insurance. Even though it would be super convenient.  I just don't want to take away the guests' motivation to leave everything clean and intact upon their departure. 

If anybody has found a work-around for this psychological factor, let me know. 

I have a bit of experience with both sides of this coin.  When my cabin was managed by a rental agency, they required a damage waiver.  Since taking over the management myself, I require a damage deposit instead.

Our home was rented through the agency for 6 months.  During that time we had three different damage claims, with a combined total of over $800 in damages.  We have listed it ourselves for 6 months now and we've had a few darts broken and part of a board game broken - obviously all just normal wear and tear.  Quite a difference wouldn't you say?!

I know that a big part of the difference lies in the screening process, but I have to agree with the previous poster that cited guest concerns with receiving their deposit refund.  I think people really pay attention to that.  I know that every person I talk to in the initial stages of the whole process wants to know when they can expect to receive that refund.  I can't imagine ever considering a damage waiver after the experiences I've had.

for our condo at the beach,   we require a 300  refundable security deposit for the 2011 rental season-     last year it was 250-    our 800 iron and glass coffee table was broken-   somehow they broke the iron leg off of the table but were able to stick it back in place to appear normal.......the maids found it 2 renters later-     all possible parties denied breaking the table  so we were at a loss    lol

the new coffee table is iron and slate-    hopefully it will last for us  -

we had an owners weekend stay  between some guests-    found a bucket of sand on balcony 1/2 full of sand with rest of the sand all over balcony and inside our condo.     it took the maids vacuuming over and over to get it all up/  out of the leather sofa etc.......

we charged them 150 more  for the extra clean time-   

hopefully the desire to get that 300 back will help guests take care of our condo during their stay - 

As cited above, a big problem with damage insurance is that it creates a sense of unaccountability.  A guest who has left a deposit has a stake in taking good care of the property.  A guest who is insured does not.  If I had a potential guest request insurance instead of a deposit, I would be leery.

Another problem is that the limits are too low ($1,500 to $5,000) and the price is too high. In my case it is better to insure the whole house and factor that into the rental rate.

We take a $500 deposit check on arrival which we do not cash unless there is a problem. In four years we have had three incidents of damage that required repair, same renter all three times.  The deposit covered repairs.

I was charging a $500 Security Deposit, but recently started doing both purchasing Damage Protection Insurance (which the renter pays for) and charging a Security Deposit, only difference is I reduced the amount of the deposit to $200. The insurance is not going to cover extra cleaning due to the house being left in a mess, so the deposit will take care of that. This is what the insurance company suggested and said a lot of owner's were choosing this method.

I have been researching this topic because we've been contacted by a number of parties wanting to use our property for weddings and receptions.  The CSA insurance policy seemed the best way to go.  I am considering doing this in addition to levying a hefty damage/cleaning deposit.

In reading over the exclusions - those things not covered  by the insurance policy - and confirmed by a phone call, damage done by intoxicated individuals will NOT be covered.  That's an instant loophole and bells of warning are going off. 

Now I'm not sure that I will allow weddings or receptions after all.  This may be way more than I want to wade through.  Does anyone have experience with this type of thing?

Debi

  I agree with most of the writers: a damage deposit is more of a defense against damages than insurance.  We ask for a $500 damage deposit, refundable when our cleaners find nothing amiss, and the key is returned.  Last season, we rented to a group of college students, and asked for a $900 damage deposit.  The house was left in fine shape.  We cash the check, and send one out afterwards.  We don't like to take credit cards after one renter destroyed our garbage bin, and then challenged the charge.  We won in the end, but it was a hassle.

I have used the damage insurance (I sell the travel insurance but provide the accidental damaage insurance) myself by having become an agent for Travel Guard (back before VRBO started offering this).  The insurance company has paid each claim without any problem, even when I told them the renter denied having done the damage.  In that case I had 9 girls and the bride's mom for a bridal shower weekend and they got intoxicated and vomitted in numerous places causeing an extra $400 in cleaning fees including steam cleaining fruniture etc.  The mom denied they did anything.  I told the insurance company and they paid.  Another time, a guest was opening the oven when the door handle broke.  It turned out it was not replacable as the manufacturer no longer made the parts needed to repair it.  I replaced it with a new $3000 unit ans the insurance paid me $1500.

I sometimes debate whether to charge a damage deposit in addition and if I am not comfortable with the renter I will but otherwise I don't bother.