12 Replies Latest reply: Oct 4, 2019 11:48 AM by hmmmm RSS

    Damage Insurance or Security Deposit?

    wkm2a Contributor

      Curious which one of the above you use for your STR.  I currently require a $500 security deposit but was wondering if it might be better to use the damage insurance option instead.  I think most guests only look at the bottom line and not the actual line items when they pay.  So a $59 insurance cost doesn't look so bad when compared to a $500 deposit.

       

      As a side benefit to switching to the insurance option I think I might be more prone to actually making some claims....with the deposit I find it very hard to ever withhold any of it...it has to be something dire...most times I just eat cost of any damages.

       

      Has anyone experimented between the two options?  Did it affect bookings at all?  Anyone have some opinions/data to add?  Thanks!

        • Re: Damage Insurance or Security Deposit?
          wildiris Active Contributor

          There have been lots of threads and posts written regarding the pros and cons of collecting a refundable damage deposit versus the property damage protection ("PDP") offered by HomeAway.  Here are some of the more recent ones -

           

          A Detailed Look at HomeAway's Advice to Owners Regarding Damage Deposits

          How do I protect my property from damage?

          CSA Caution

          Anyone have a successful outcome with Property Damage Protection?

           

          Keep in mind that the PDP policy covers the guest - not the owner.  The guest is the insured.  Further, the PDP policy only covers accidental damage caused by the guest.  The policy won't pay if the guest denies causing the damage.  The policy won't pay if the damage is considered to be deliberate, such as a guest throwing something at your wide screen TV. 

            • Re: Damage Insurance or Security Deposit?
              wkm2a Contributor

              I was thinking more along the lines of does choosing one over the other effect your booking rate.  I understand the nuances of how they differ from each other.

                • Re: Damage Insurance or Security Deposit?
                  bonesxxx Active Contributor

                  It isn't a one-for-one choice.  Apples and Oranges.

                   

                  If you choose the traveler insurance, you lose the ability to claim anything but accidental damage that the guest admits to.  You lose the ability to withhold $ for excessive cleaning, broken items, non-disclosed pets, etc.

                   

                  If anything, you add insurance on top of your DD.  If you want to see the impact on your booking rate, try lowering your DD to $300.  Sounds like you rarely (if ever) use it.

                  • Re: Damage Insurance or Security Deposit?
                    wildiris Active Contributor

                    Sorry - I misunderstood the gist of your original post.  In my 10+ years of renting, I have only used a refundable damage deposit, so I can't say whether or not I would get more bookings if I used the PDP instead.  In my estimation, the PDP is worthless from an owner's perspective.


                    For me, giving guests an incentive to take good care of my rental is much more important than possibly renting more days/weeks per year. 

                • Re: Damage Insurance or Security Deposit?
                  hmmmm Senior Contributor

                  Charge a refundable damage deposit.

                   

                  Guests are more willing to follow the rules and keep the home in good shape if they have money on the line.
                  It's personal.

                  • Re: Damage Insurance or Security Deposit?
                    calicalling Active Contributor

                    I do both. I once upon a time used the CSA offered by HA/VRBO, but it is a complete joke, IMO, so a few years back I started using my own damage reimbursement account.

                     

                    By that I mean that I charge each guest a small fee which I keep in an account for repairs and improvements. When things happen, I don't feel the need to flip out over it.

                     

                    If guests shoose to buy CSA-type insurance, they can do that, but I still charge my fee.

                     

                    I also charge a damage deposit, which creates an incentive for guests to leave my homes in good condition.

                     

                    It is always difficult to know if a certain policy has affected bookings. But I am booked more than I should be. And I've had very few questions and no complaints about this that I can think of.

                    • Re: Damage Insurance or Security Deposit?
                      apollocabins New Member

                      I've only used the insurance 3 times so far.  My thoughts?  USELESS.  On my second rental, the back door window got broken.  The cleaning company alerted me to that fact when they arrived to clean.  I clicked on the "make a claim" button from the owners dashboard page.  Got the claim rolling, sent pics, statement, etc.  3 weeks later I get an email from the insurance saying they investigated by calling and asking guest if they broke the window,  Guest said "Nope".  Claim denied.  They said they only cover Tenant caused damage.  To me that's like getting pulled over by the cops just after an intersection with a huge burnout in it and my tires are still smoking and the cop asks. "do you know why I'm pulling you over?" and I say "Nope.  Or two guys in an elevator.  One guy farts.  They both know who did it.  So, I expect I would NEVER get a claim approved if the guests flat out deny causing the damage.  So now I'm disgruntled and back to a security deposit of $250.  I'll have to see if this impacts my booking rate...

                        • Re: Damage Insurance or Security Deposit?
                          hmmmm Senior Contributor

                          Point here is you must have your own refundable damage deposit.

                          I collect both.


                          Once, I had a person but break a pottery barn dining chair.

                          I took pics and let the vacationer know that I would file in their behalf, but if the insurance company denied, it would come from their security/damage deposit as per my contract.


                          They claimed it and the insurance paid it.

                          Done