What is a Damage Waiver?

Join the Lodgify newsletter

Once a month, get free templates, expert tips for hosts, industry news, webinar invitations, and more.

Subscribe

I agree to receive commercial communications from Lodgify.

How it works

A host or property manager offers guests the option to pay a smaller, non-refundable damage waiver fee instead of a larger, refundable security deposit. If the guest chooses the waiver, they pay the fee as part of their total booking cost.

If accidental damage occurs during the stay (e.g., a broken glass or a stained towel), the cost of repair or replacement is covered by the waiver, up to its specified monetary limit. The guest is not charged further for these covered incidents, and the host avoids the process of claiming from a deposit.

Any damages that exceed the waiver's coverage limit or are deemed intentional remain the guest's financial responsibility.

Why it matters

A damage waiver can make a property more appealing to guests by reducing the large upfront payment required for a security deposit. This lowers the barrier to booking and can increase conversion rates.

For hosts, it streamlines operations by removing the administrative work of managing, holding, and refunding security deposits, and it helps avoid potential disputes over minor damage claims. Some property management software, like Lodgify, allows hosts to easily add and manage such fees as part of the booking process, providing a predictable way to handle small accidents.

Examples

• A family with young children books a beach house. They opt to pay a $59 non-refundable damage waiver fee instead of a $500 security deposit, feeling it's a worthwhile cost for peace of mind. During their stay, a child accidentally knocks over a lamp, and the waiver covers the $45 replacement cost.
• A property manager lists a luxury apartment and requires either a $1,000 security deposit or a $99 damage waiver. A guest on a business trip chooses the waiver to avoid having a large hold placed on their corporate credit card.
• For a mountain cabin rental, the owner includes a mandatory $75 damage waiver fee in every booking. This fee covers accidental damages up to $1,500, which simplifies their process and ensures every stay is covered for minor issues without deposit disputes.