A shocking 77% of Airbnb hosts run their properties without collecting an Airbnb security deposit. This risky decision could lead to thousands in uncovered damages. While AirCover policies protect hosts with coverage up to $3 million, many hosts still find a security deposit to be a crucial safety net for their property. Hosts can choose deposit amounts between $100 to $5,000 based on their property features and location. However, understanding how to manage these deposits is essential, as it requires knowledge of the entire process—from deposit amount selection to damage claim submissions within 14 days.
This complete guide will help you understand Airbnb security deposit policies better. You’ll learn how to set the right deposit amounts and file successful damage claims to keep your property safe.
What is an Airbnb Security Deposit?
An Airbnb security deposit functions much like a hotel asking for a credit card at check-in—it helps protect property owners from any potential damage caused by guests during their stay. In the past, hosts could set their own security deposits directly through the platform. However, Airbnb has changed this system, and now most hosts can’t set their own deposits via Airbnb’s Resolution Center. The exception to this rule is for hosts using API-connected software, who can set deposits through the offline fees feature.
Why I Need to Ask For a Security Deposit?
A security deposit Airbnb provides several key benefits:
It offers financial protection in case of property damage or other guest-related issues. This allows hosts to feel secure knowing they have an additional layer of protection.
It encourages guests to take better care of the property, as they are financially responsible for any damages that occur during their stay.
The presence of a clear deposit policy helps handle damage situations more smoothly, as it sets clear expectations for both guests and hosts.
However, setting an Airbnb deposit is not without its challenges. Some guests may be discouraged by the extra upfront costs, which could potentially affect booking numbers. Additionally, the process of claiming funds requires solid documentation and can be time-consuming.
Hosts using API-connected software need to ensure they clearly communicate deposit requirements when guests book. Typically, deposit amounts range from €100 to €2,000, but hosts should assess their property type, location, and potential risks before deciding on the appropriate amount.
How to Set an Airbnb Security Deposit?
To set up an Airbnb security deposit, follow these steps:
Once you’ve set the deposit amount, make sure to clearly state your deposit requirements in the listing description and house rules. It’s advisable to include a PDF document that outlines the deposit’s purpose, amount, and conditions for returning it.
How Much is Airbnb Security Deposit?
Typically, Airbnb security deposits range from £79.42 to £3,970.80, depending on the property.
Here are the factors to consider when setting the amount:
Factor | Description |
Property Value and Contents | Higher-value properties or expensive furnishings may require a higher deposit. |
Recent Renovations | Newly renovated properties might need extra protection to safeguard against potential damage. |
Guest Profile | Families, solo travelers, or groups might require different deposit amounts depending on the property. |
Location | Properties in high-demand or high-risk areas might require larger deposits to cover potential risks. |
Recommendation | Experts suggest keeping the deposit at 20% or less of the total booking cost to avoid discouraging guests. |
Experts recommend that Airbnb security deposit should be kept at 20% or less of the total booking cost to avoid deterring potential guests.
What Does an Airbnb Security Deposit Cover?
The Airbnb security deposit serves as a protective measure for hosts in the event of damage caused by guests during their stay. It helps ensure that hosts are compensated for potential costs incurred from property damage. Specifically, the security deposit Airbnb covers the following:
Damage to furniture, valuables, and personal items: Any harm caused to furniture or valuable items such as electronics, art, or appliances during the guest's stay. This can include accidental spills, scratches, or other types of damage.
Vehicle and boat damage: If a guest damages a vehicle or boat parked on the property, the Airbnb deposit can cover the repair costs, provided the host has documented the damage properly.
Cleaning costs: In cases where a guest causes unusual messes—such as stains, smoke, or an excessive amount of trash—the Airbnb security deposit refund can help cover the cost of extra cleaning.
Lost income: If property damage from a guest makes the rental unlivable and leads to canceled bookings, hosts can use the deposit to recover lost rental income for the period when the property is unavailable for future guests.
However, the Airbnb damage deposit has certain exclusions. There are damages and situations that are not covered by the deposit. These include:
Normal wear and tear: The usual gradual deterioration of furniture, appliances, or the property itself due to regular use is not covered by the Airbnb security deposit. For example, worn-out carpets or fading paint due to age would not be eligible for a claim.
Natural disasters: Events like floods, earthquakes, or storms, which are beyond human control, are not covered by the deposit. Hosts should ensure they have separate insurance coverage for these types of occurrences.
Guest injuries: If a guest gets injured during their stay, the security deposit Airbnb does not cover medical costs. Injuries to guests are covered under host liability insurance, not the security deposit.
Routine cleaning tasks: Regular cleaning tasks, such as making the bed, washing linens, or removing minor dirt, are not covered. The deposit is designed to cover additional cleaning costs incurred due to damages or unusual messes caused by guests.
This distinction is crucial for hosts to understand, as they need to properly document and file claims to receive compensation for damages that fall within the covered categories. Knowing the exact limits of the deposit helps prevent misunderstandings and disputes with guests over what the deposit can and cannot be used for.
How to Claim Airbnb’s Security Deposit as a Host
If damage occurs during a guest's stay, hosts must follow Airbnb’s established process to claim a security deposit. First, hosts should document the damage by taking clear photos and providing detailed written descriptions. After gathering all the necessary evidence, hosts need to access Airbnb’s Resolution Center and submit their claim within 14 days after the guest’s checkout. It is essential to provide supporting documentation such as receipts, repair estimates, and any other relevant materials to back up the claim.
Once the claim is submitted, the guest has 24 hours to respond. If the guest accepts the payment request, they have 72 hours to either approve or decline it. In cases where the guest declines or fails to respond, Airbnb’s support team will step in to mediate and help resolve the issue.
Security Deposit vs. Airbnb’s AirCover: Do Hosts Still Need One?
AirCover and security deposits provide different types of protection but can work together for maximum coverage. AirCover offers damage protection up to $3 million, but hosts may still want to set a security deposit to cover smaller damages or issues that arise quickly.
AirCover is generally better for minor damages and situations that require extensive documentation, while security deposits offer faster compensation for guest-related damage and disputes.
Hosts should consider using both protections. By setting a reasonable security deposit, they can prevent issues and use AirCover as backup for larger claims.
How to Avoid Security Deposit Disputes with Guests?
Clear communication plays a crucial role in avoiding disputes with guests regarding the security deposit. Hosts should be transparent by clearly outlining their deposit policies in the listing description and house rules. Additionally, it is essential to document the property’s condition before and after the guest's stay by taking before-and-after photos, which serve as proof of the property's state. By following these practices, hosts can minimize any concerns and ensure that their Airbnb security deposit is managed effectively.
Alternative Protection Strategies for Hosts
Apart from relying on the Airbnb security deposit and AirCover, hosts can explore other strategies for additional protection. Third-party insurance providers, like Safely, can offer coverage starting as low as £6.35 per day, with quicker claims resolution compared to Airbnb’s standard processes. Rental agreements also help protect hosts by setting clear expectations, house rules, and damage protocols with guests. Furthermore, guest screening, whether through Airbnb’s built-in tools or third-party services, can provide an added layer of security by verifying the backgrounds of guests before booking.
How are third-party security deposits managed by Airbnb?
Through certain API-connected third-party property management systems (PMSs) and risk management tools, such as Superhog, hosts and property managers can collect an Airbnb security deposit separately.
For instance, Superhog’s Know Your Guest solution allows you to set your own deposit amount, which can exceed the $5,000 limit on Airbnb. This process is handled independently from the Airbnb platform, giving hosts more flexibility in managing their security deposit Airbnb requirements.
Conclusion
While the Airbnb security deposit and AirCover offer protection, hosts can further safeguard their properties by using a combination of security strategies. By maintaining transparent policies, documenting damages properly, and using additional protection tools, hosts can ensure a smooth experience while minimizing risks.
With the right mix of security deposit Airbnb and insurance, along with proactive management, hosts can create a safe and professional environment that benefits both them and their guests.
If you feel overwhelmed by all the paperwork, accounts, and booking management UpperKey can help you have the best possible outcomes when running an Airbnb. UpperKey handles everything for you and on top of that pays a guaranteed fixed rent each month, all with no fees or commissions.
