Damage Waiver Fee: The Silver Bullet for Short-Term Rentals?

Many hosts cover small guest damages out of their pockets and consider these expenses a part of the cost of running a business.

Paying for a set of linens here and a set of wine glasses there will have you out of money in no time. And it shouldn’t be that way. You can get your expenses reimbursed by collecting a damage waiver fee.

In this article, we’ll explain what a damage waiver is and how it differs from damage deposits. We’ll tell you how it works and what alternatives you can use to protect your listings.

What is a damage waiver fee? 

First things first. Let’s clarify what “damage waiver” means.

A damage waiver fee is a small sum that hosts charge the client while renting out for short-term stays. This fee protects the guest from paying the full price of the damage.

It also creates a piggy bank for a host they can use in case of guest damage. It’s an add-on that homeowners and hosts can request to waive guests’ liability for damages that happen during the rental.

The waiver is usually non-refundable and covers accidental damage. It means that if a guest accidentally damages something during their stay, they are not responsible for covering the repair or replacement.

A damage waiver fee is not mandatory, and the cost varies depending on the rental company’s terms of use or the hosts’ preferences.

Damage waiver fees usually go hand in hand with STR insurance. But before you start dealing with damages, take a look at how to bring the guest damages in vacation rentals to a minimum with Rolando Mota and Daniel Tocora.

 

What damage waiver fee does and doesn’t cover

A vacation rental damage waiver may not cover all kinds of damages and losses or their total amount. For example, some companies don’t reimburse losses from intentional, reckless behavior or illegal activities. That’s why you should read the details of a property damage waiver policy both as a guest and as a host to know the terms of the deal.

As a general rule, a vacation rental damage waiver covers:

• Stained linens, Smeared towels
• Unintentional guest damage
• Unsolicited smoking damage
• Unapproved party damage
• Delivery expenses of replaced items

But a vacation rental damage waiver typically doesn’t cover:

• Cosmetic damage
• Pet damage
• Wear and tear
• Management fees
• Maintenance expenses
• Approved party damage

 

Even though a damage waiver fee usually provides lower coverage than insurance, it’s often enough for most rental damages.

How does a damage waiver work?

Rental damage waiver fees work pretty similarly to other kinds of waivers. As a homeowner or host, you subscribe to the damage waiver service through a rental platform. Now, you can request your guests to pay a specific fee to waive the liability for accidental property damage.

The charges guests pay depend on the rental company’s rules and property type. It may be a fixed damage waiver fee or a percentage of the total rental sum.

Once the guest buys a damage waiver, the rental platform selling it becomes responsible for reimbursing the loss.

Examples of damage waiver policies

If you want to rent properties with a damage waiver fee, you must make sure the platform you use for rentals supports them. For example, Airbnb doesn’t support a damage waiver fee for apartment rentals, and you will need to combine it with additional tools.

Here are some popular options to collect a damage waiver fee:

• Vacasa damage waiver fee. Vasaca vacation rental management company charges guests a $15-$35/night damage waiver fee, depending on the house size. The Vacasa limited damage waiver covers accidental damage up to $3,000.
• VRBO damage waiver fee. VRBO has an Accidental Damage Protection policy guests can buy 24 hours before check-in. They choose from three options: $59 for $1500 coverage, $89 for $3000, and $119 for $5000. Is the VRBO damage waiver refundable? Yes, if you ask for a refund before the scheduled arrival date.
• Truvi damage protection. Truvi provides comprehensive damage protection up to $1M without requiring waivers or deposits from guests.

Learn more about the Airbnb damage policy and protect your listing against damage today.

 

Pros and cons of using a damage waiver fee 

“What business just lends a stranger hundreds of thousands or millions of dollars of assets, no questions asked?” Benjamin Earley, CEO of HOLT.

They wouldn’t. Yet, many property managers and owners do this every single day, no questions asked!

Have you ever rented a sports car for the day? That’s exactly what Benjamin’s wife did for a birthday surprise. Why is this relevant?

Simple. “The hoops she went through to get a $200k asset for 24 hours was weeks long and around 10-15 hours of work on documents, insurances, trip layouts, and much more.” It’s tedious, but without it, there’d have been no Lamborghini waiting on the other side.

Property managers give expensive assets to guests every day without any risk management. That leaves them vulnerable.

Benjamin Earley explains why he uses a risk management strategy, including damage waivers, in his short-term rental business.

Having a waiver is the first step in managing risk, and if it does discourage guests, it’s likely those guests are not the type of guests you want. 

Use the deterrent to your advantage because, without a damage waiver in place, you’re not just leaving yourself vulnerable to guest damages; you’re leading your business down a path of out-of-pocket payouts that could ultimately result in loss of revenue.

Benefits of using a damage waiver fee

Here are a few other reasons property managers implemented damage waiver fees into their booking journey workflow:

• They help you improve the guest experience. Accidents happen. We know this, you know this, and guests know this. The security of having a waiver in place can help remove any friction, such as bad reviews that can arise post-stay if an accident occurs. It also puts guests at ease knowing it’s been sorted ahead of time. 

• Saves time and reduces manual labor. You can diminish the time associated with handling guest-related damages, chasing guests after their stay, and the hassle associated with physically collecting and refunding waivers. 

• Cover minor incidents of damage quickly. You won’t need to pay out of your pocket for guest damages. Get the balance of happy guests and happy owners, while ensuring you do not foot the bill every time an accident happens.

 

Cons of a property damage liability waiver

Damage waiver fees offer real benefits — they create a fund for minor repairs, reduce disputes, and are straightforward to implement. However, they still create guest friction through non-refundable fees at checkout and typically cap coverage at low amounts like $500.

That’s why many professional property managers are moving beyond waivers entirely in favor of comprehensive damage protection services that eliminate guest-facing charges while providing stronger coverage.

Renting a property is costly, and extra fees on the platform can make clients unhappy and decide to look elsewhere. Property managers may have concerns about fees going to the rental platform instead of their own pockets.

Collin H., a property manager, shares his experience:

“I went to VACASA.com and booked this cabin for January 11-14. The nightly rate is $127. The total rent is $381. But notice the “fees” that VACASA is adding on: A $45 “hot tub” fee, a $66.60 “booking fee”, and a $49 “limited damage waiver. 

Well, that’s $160 in purely junk fees, straight into VACASA’s pocket. They don’t share this revenue with the owner.”

Here are some other drawbacks of damage waivers you should consider:

• Guests must report damages and take a picture of them before leaving. Or at least the property manager must be able to prove that a specific guest has done the damage. 
• Coverage may be too low to cover severe damages. Some platforms pay back $3000 maximum, which is not enough for expensive repair works.
• Many common types of damage, like intentional damage or stolen items, aren’t covered.

To avoid the limitations of damage waivers — capped coverage, guest friction from non-refundable fees, and per-booking collection hassles — many property managers now use comprehensive damage protection services like Truvi. These eliminate the need for waivers or deposits entirely while providing up to $1M in protection across all booking channels, with no guest-facing charges.

 

Damage waiver vs damage deposit: what is the difference?

Now that you know what is a waiver fee for apartments, it’s time to talk about damage waiver fee alternatives. Damage waivers and deposits protect hosts from vacation property damage in different ways. Hosts often use them together.

But what is the difference, and how do you know which one best suits your short-term rental business? 

 

Benefits: Damage Waiver vs Damage Deposit
Waiver		Deposit
Property Manager Experience	Guest Experience	Property Manager Experience	Guest Experience
New line of revenue	Guest “waives” liability for accidental damage	Unhappy guests charged with non-refundable operational fee	Damage deducted after check-out
No guest friction post-stay	Small damages settled before check-in	Reviews impacted	Post checkout friction/hassle
No paying transaction fee	Full transparency, easy to report damage	PM pays out of pocket for minor damages	Damage concealed: guest worried by non-refundable operational fee

 

Damage waiver vs damage deposit: the principal difference between them is that a damage waiver is a fixed, one-time, non-refundable fee. Large STR companies often opt for damage waivers because they are fast, generate revenue, and reduce conflicts with guests over damaged items. 

With a damage deposit, guests pay a small non-refundable operational fee that helps cover the operational costs related to operating the deposit and authorizes the guest’s card to debit the full amount. Smaller short-term rental business owners often prefer damage deposits. They cover all types of damages up to a limit, offering a sense of security, helping ensure guests respect the property, and giving greater leverage if something happens. 

However, many property managers are moving away from the traditional damage deposit in favor of damage waivers.

Do you need a damage waiver or a damage deposit?

Let’s decide what will serve your needs in the best way: a damage waiver vs a damage deposit. First, weigh out the pros and cons for your business to protect your property while still enticing guests. Here are some questions to consider: 

1. Think about the standard of your property: is it providing a luxury stay? Adjust your deposit or damage waiver to reflect this. If you’re concerned about potential damages, you can add damage protection to cover any harm your properties might face.   
2. Who is your target guest? Do they have the means to provide large deposits, or would they benefit from a damage waiver?
3. Think about your turnaround time: is it quick, or do you have periods between guests checking out and new guests checking in? Having a waiver pot available for quick turnarounds would help cover damages. Longer turnarounds allow for disputes over damage deductions from a deposit.

 

What’s the difference between damage waiver vs damage deposit vs insurance?

 

 

Beyond waivers: Eliminate guest friction with damage protection

Damage waivers solve some problems — they’re non-refundable, create a fund for minor repairs, and reduce disputes. But they still create guest friction. Every booking requires collecting a fee; guests see an extra charge during checkout, and coverage is limited (typically $500 or less).

Professional property managers are moving beyond waivers to comprehensive damage protection that eliminates friction entirely. Instead of charging guests waiver fees for each booking, modern protection services provide coverage without any guest-facing charges or opt-ins.

Truvi’s Damage Protection covers up to $1M in damage without requiring waivers, deposits, or any additional fees from guests. The protection is automatic for all bookings, so there’s no friction in the booking process and no disputes about coverage limits. When damage occurs, you report it through your dashboard and get paid directly — typically within 5 business days.

The key advantage: prevention plus protection. Truvi’s Guest Screening catches problem bookings before they happen, reducing the damage incidents you have to deal with in the first place. Combined with damage protection, you’re preventing issues upfront and resolving them quickly when they do occur.

This approach works across all booking channels — Airbnb, Vrbo, direct bookings, any platform. No per-booking waiver fees to collect, no coverage limits to worry about, no guest complaints about non-refundable charges.

 

Ready to protect your properties without waiver friction?

Get up to $1M damage protection and comprehensive guest screening with zero guest-facing fees. No waivers to collect, no deposits to manage, no coverage gaps.

View pricing and get started today.