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Self Insuring with Damage Waivers

Updated over 4 months ago

We looked at how to set up a basic Security Deposit verification rule in this article: Verification Rule: Security Deposit. In that same Security deposit rule, there is also an option to offer a Damage waiver to your guests as an alternative to a refundable deposit. Using this can be a way for you to start self-insuring. This article will walk through the configuration options for security deposits & damage waivers and give you templates to use as a starting point.

In this article:


Offering a Choice - Security Deposit or Damage Waiver

One option is to offer both a security deposit and damage waiver, giving guests a choice between a refundable security deposit and a non-refundable damage waiver. The key to making the damage waiver more attractive is to have it cover higher damage costs than the deposit option. You can add different descriptions to the page with the choice, the deposit page, and the waiver page to explain the difference between the two.

Configuration steps

  1. Add a Damage deposit verification rule

  2. To exclude Airbnb: Select Source inclusion type of All, except selected, choose Airbnb from the dropdown

  3. Click Get started on the Security deposit section

  4. Add a Security deposit amount & terms (check out our templates below)

  5. Toggle on Delay deposit until X days, we recommend setting this to 3 to avoid holding deposits for too long

  6. Click Activate on the Security deposit section

  7. For the Damage waiver section, click Get started

  8. Add a Damage waiver amount per night & terms. This is where you can clarify how much accidental damage is covered, this should be higher than the amount of the security deposit, or there would be little benefit to choose this option (check out our templates below)

  9. Choose a maximum amount per reservation

  10. Optionally, add a minimum length of stay to offer the Damage waiver

  11. Add an optional description to show on the Damage deposit screen (see below)


Offering an Optional Damage Waiver

Typically, Airbnb guests are excluded from the Security Deposit verification rule. We have the ability to offer Airbnb guests the option to purchase a damage waiver to cover accidental damage for additional peace of mind during their stay. Additionally if you insure in other ways, you can always add an optional waiver on top of this for all reservations.

Configuration steps

  1. Add a Damage deposit verification rule

  2. To only show for Airbnb: Change Source inclusion type to Only selected, choose Airbnb from the dropdown

  3. Ignore the Security deposit area and scroll down to the Damage waiver section

  4. Click Get started under the Damage waiver

  5. Determine waiver amount per night ($20-35 is a good starting point)

  6. Add a Damage waiver terms & conditions. This is where you can clarify how much accidental damage is covered (check out our templates below)

  7. Specify a maximum amount per reservation (usually $150-200, or if using a flat rate this should be the flat rate amount)

  8. Toggle on the Make Waiver Optional setting

  9. Click Activate

  10. Assign verification rule to your Portals

  11. Activate the verification rule using the toggle at the top


Templates

If you want help getting started with your Security Deposit and Damage Waiver terms & conditions we have the below templates set up for you to use! Just update the numbers and coverage details to fit your needs.

Choice description

You can chose between a refundable security deposit or a non-refundable damage waiver. The damage waiver protects you from accidental wear and tear (up to $500).

Security deposit description

Deposit Requirements:

  • Amount: A refundable security deposit of $250 is required prior to check-in. This deposit is collected at the time of guest completing pre-check-in verification and will be held on your payment method for the duration of your stay.

Coverage:

  • What’s Covered: The $250 security deposit is in place to cover any significant damage or additional charges that may occur during your stay. This includes:

  • Damage to Property: Any damage to furniture, fixtures, walls, or other property that requires repair or replacement.

  • Excessive Cleaning: If the property is left in an excessively dirty or messy condition that requires more than standard cleaning services (e.g., deep carpet cleaning, removal of stains, etc.).

  • Violation of House Rules: Fines or fees resulting from breaking house rules, such as smoking indoors, having unauthorized pets, or exceeding the maximum number of guests allowed.

  • Loss of Property: Any significant loss or theft of property items provided by Management (e.g., linens, electronics, decor).

Exclusions:

  • Normal Wear and Tear: Minor scuffs, light wear on furniture, or small scratches that occur from normal use will not be charged. These are considered part of everyday use and will not affect your deposit.

  • Minor Accidents: Small accidents, like breaking a glass or a plate, or leaving behind a minor mess that can be easily cleaned, are generally not charged unless they cause significant damage.

  • General Use: General cleanliness that falls within normal expectations (e.g., leaving the bed unmade, dishes in the sink) will not result in forfeiture of your deposit. These are part of our standard cleaning process.

Additional Charges:

  • Exceeding the Deposit: If the cost to repair damages, replace property, or address violations exceeds the $250 security deposit, Management will retain the full deposit and charge the remaining balance to the payment method on file. You will be notified of any additional charges.

Refund Process:

  • Inspection: After your departure, the property will be inspected. If no major issues are found, your full $250 deposit will be refunded.

  • Deductions: If significant damage, excessive mess, or rule violations are identified, the cost of rectifying these issues will be deducted from your deposit. Any remaining balance will be refunded.

  • Timing: Refunds are typically processed within 7 business days after check-out, depending on your payment method and financial institution.

Damage waiver description

Thank you for choosing us for your stay. To enhance your experience and offer peace of mind, we provide a Damage Waiver option.

This waiver covers reported incidental damage to the property during your stay, ensuring that minor mishaps don't disrupt your visit or your finances.

Waiver Fee:

  • A non-refundable of $15 per night (Maximum: $150) is applied to your stay.

Procedure for Reporting Damages:

  • Please report any damages that occur during your stay to the management as soon as possible.

  • Unreported damages found after checkout will not be covered by this waiver and may result in additional charges.

Damage Waiver Coverage:

  • The Damage Waiver covers you for any accidental damages to the room or property furnishings that occur during your stay, up to a maximum amount of $500.

  • This coverage includes but is not limited to:

  • Furniture and Fixtures: Minor damages such as scratches, scuffs, or stains on furniture, flooring, or walls.

  • Household Items: Breakage of kitchenware, lamps, or other household items due to accidental mishandling.

  • Linens and Towels: Damage to bedding, towels, or other linens beyond normal wear and tear.

Exclusions:

  • The Damage Waiver does not cover:

  • Intentional Damage: Any damage caused by intentional acts, gross negligence, or failure to follow the property’s rules.

  • Unauthorized Activities: Damages resulting from unauthorized activities such as smoking indoors, hosting events or parties, or any illegal activities.

  • Excessive Cleaning: Costs associated with excessive cleaning beyond what is reasonably expected from typical use.

  • Pet-Related Damage: Damages caused by pets to furniture, walls, doors.

  • Property Loss or Theft: Loss or theft of property items, including but not limited to electronics, décor, and personal belongings.

Acceptance:

  • By opting into the Damage Waiver, you agree to the terms outlined above. Non-acceptance of the Damage Waiver requires a refundable security deposit, the amount of which is based on the property and duration of the stay.


Recommendations & Common Questions

  • Create a Separate Stripe Account - It is recommended, if you're planning to self insure with Damage waivers, to create a separate Stripe account to collect these payments. That way you can have this money set aside for any damages that may occur. You can keep some in reserves and take the rest as revenue.

  • Use Length of Stay Minimums - You have the ability to not offer the damage deposit for stays under a certain number of nights. This is helpful if you're charging $10 per night for the waiver and would prefer to collect the larger deposit instead, especially if your shorter stay guests tend to cause more damage.

  • Do guests behave worse after choosing a Damage waiver? Based on the large number of guests we've seen use the Damage waiver option, there hasn't been any correlation to their behavior or damage caused. Usually, guests choose this option for peace of mind for accidents.

  • What should we charge for a waiver? The amount you should charge will differ based on your property's cost per night and typical security deposit. One recommended starting place is $250 security deposit covering $250 of damage, and a $15 per night damage waiver (with a $150 maximum) covering up to $500 of accidental damage.

  • What should the descriptions say for Security deposits and Damage waivers? We have template examples above, click here to read.

  • Are you allowed to offer Damage waivers to Airbnb guests? Because this is 100% optional, you should not have any issues with Airbnb guests. They are able to opt out if they don't want to use the waiver.

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