Vacation rental businesses prefer either of the two methods, Security Deposits or Damage Protection, for securing some sort of leverage that’ll safeguard their property from damages.

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Vacation rental owners are always terrified of ending up with their very own AirBnb Horror Story, that the guests would trash and mess up their place during stay. The ones that are new to this business have special reservations against guests coming in and treating the place like they own it, and how could they. While there ain’t no safeguards against travelers going rogue and unpredictable human nature, the practice of having guests deposit a certain fee especially for this purpose helps you as a rental owner to breathe a sigh of relief.

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Charging a Security Deposit, i.e. collecting a Refundable Payment up front is preferred option for some. This allows for owners to have a pot in which they can dip into and deduct funds for any damages to their property. Others prefer charging guests for damage protection insurance, that’s usually a much smaller and non-refundable fee that imparts an additional level of protection to the property. The owners in this case have to go through the insurance company for receiving suitable compensation in return for damages during stay.

We’ve curated a list of Pros and Cons, in Tabular form format for your convenience –


Pros Cons
Biggest Advantage is the Flexible Rate of Security Deposit. Comfort Sleep for Owners/Managers knowing their Grandiose Vacation Rental is safe and sound. Biggest Disadvantage is the Large Sums of Upfront Payments, Perhaps a Deterrent for Potential Renters
Deters any Unsuitable Renters from Causing Damages Vulnerable to Disputes and Disagreements, As its the Vacation Owners word against Renters.
The Perfect Backup Plan, Upfront Payments allows for Deductions in case of Repairs, Replacements or Extensive Cleaning. Can be a Hassle for the Homeowners, Claiming against the Damage Deposits due to Local/National regulations, Adhering to specific timelines as well as the precise amount to be Deposited under such an Escrow account.
Imparts a Greater Sense of Responsibility in Guests. It basically boils down drawing the line, what all and how all to deduct from!



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Whilst making preparations for the vacation, adding the refundable deposit to the totalled cost of vacation and suddenly the amount they’ll end up losing, if and how, becomes very real. Though not much of a worry for the experienced and responsible renters, it has a tendency to scare away the relatively newer ones.


Pros Cons
Biggest Advantage is that its hassle free and Guests only have to pay a nominal fee that does not has to be refunded during check outs. Biggest Disadvantage is that it often does not include each and every aspect under the insurance cover.
Is in addition to the Short-Term Rental Approved Home Insurance. Additionally, some plans may cover replacement costs to damaged rooms, furniture or electronics, but not the labour costs for these reparations.
Surge in Sharing Economy: Huge growth in Service Providers facilitating Damage Protection Insurance for Vacation Rentals Leads to a certain reckless behavior in the guests. As Damage Protection, least on face value means that renters don’t have to pay from their own pockets….
Increasingly preferred by Travelers as well as Vacation Rental Owners/Managers From filing the insurance cover application, being patient with the entire , sometimes cumbersome process, and finally onto scheduling repairs, maintenance and replacements….


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Three out of Four Guests Prefer Damage Protection, Though it can be time consuming in the Long Run. Potential Travelers tend to shy away from depositing a huge amount upfront, and the lengthy process of extracting funds from insurance companies is the only thing that deviates personal for vacation rentals website Owners towards other options.

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