Who Should Initiate Damage Coverage …the Lodging Provider or Guest?

If you look at Online Travel Agent's (OTA) like VRBO or AirBnb, they provide an option for the guest to purchase damage protection. While both parties benefit, we believe that is backwards.  It's the lodging provider who stands to suffer a loss in the event of guest damage and its best that they be the one to initiate coverage and receive the funds in the event of a claim. 

Traditionally, vacation rental owners have protected against accidents through the collection of damage deposits. The funds were held in escrow and the property was inspected at departure to ensure there was no damage resulting from the guest stay.  If not, the deposit was refunded. If yes, the lodging provider and guest have an unpleasant conversation about cost of repairs.

Today, the financial risk is taken on by the underwriter and the guest pays a fee equal to a fraction of the coverage amount.  Eliminated is the need to for the guest to come out of pocket with hundreds or thousands of dollars and the need for the lodging provider to manage those funds. The lodging provider purchases coverage and adds a fee, typically referred to as a 'damage waiver', to cover the expense of the policy. Both parties are protected. 

Damage protection should be put in place for every reservation.  You never know when an accident will happen, no matter how large or how small. Guests should be made aware that coverage is in place and set rental terms that require a guest to report damage.  We provide sample rental agreement terms to our participating partners.  Once damage is reported, an online claim is initiated including a photo of the damage and a copy of the receipt(s) for repair or replacement.