All You Need To Know About The Airbnb Security Deposit

The Airbnb security deposit is one of many things that hosts may find appealing about the Airbnb platform. It’s the world’s most popular short stay platform for a good reason. Airbnb offers a great system for hosts who want to list their properties and an appealing interface for guests looking to book a stay.

Despite this, some would argue that Airbnb seems to prioritise guest satisfaction over that of the host. On online forums, many hosts complain that a guest can easily create a new account should they receive bad reviews on their profile – whereas hosts are more limited as they are listing a physical property.

The most glaring issue, however, is Airbnb’s lack of full protection for hosts. While they do provide Aircover, the cover it provides is limited compared to specialist insurance.

The Airbnb security deposit system is one defence against this scenario, but it has its own pros and cons – with the biggest issue revolving around disputes and whether the platform will side with you or your guest.

How does a security deposit work as a host? Can you set one yourself? Even if you do – will it really protect you? Let’s take a look.

How does the Airbnb security deposit work?

The difference between Host Damage Protection and a security deposit

How to resolve a dispute through Airbnb

What alternative is there to security deposits?

How does the Airbnb security deposit work?

Airbnb recently updated its deposit policy, removing the option to set a deposit amount as a host. Instead, guests will use Airbnb as normal and if they cause damage to your property, you can submit a claim for damages through the Resolution Centre. The platform itself already holds the guest’s card details from their booking and will inform them they may be charged in the event of a dispute.

If you manage your Airbnb bookings at scale using an API software tool, you’ll still be able to use the old hosting option to set your own deposit amount. When you’ve set this up, the guest must accept the deposit outlined in their booking and usually agree to a holding charge being placed on their card.

The difference between Host Damage Protection and a security deposit

The recent changes to Airbnb’s security deposit system makes it more of a part of their overall ‘Aircover’ policy. In the past, you could set your own security deposit amounts that you could claim for. Now Airbnb will simply charge a guest directly if they side with you following a dispute. All of this is included as part of Aircover’s overall protections.

A security deposit generally protects you for smaller amounts and will be more often used when minor breakages occur. Airbnb’s Aircover policy also promises cover of up to $1 million in the event of damage happening during a booking. However, Aircover doesn’t protect you from everything and it’s ‘Host Damage Protection’ (the bit that covers damage to your property), isn’t insurance. It’s cover is therefore limited and could put you at risk if you solely relied on this cover to protect your property. Our Airbnb insurance page covers this topic in more detail.

Ultimately, Airbnb’s security deposit system is limited in its ability to protect you as a host. You’ll need to appeal and hopefully win within 14 days of a guest’s stay. You’ll also need to accept whatever payment Airbnb rewards you.

How to resolve a dispute through Airbnb

You need to manually submit a claim if you feel a guest has damaged your property. This process only happens if you submit a request via the resolution centre. You’re allowed to do this as long as no more than 14 days have elapsed since the end of a guest’s stay. For some hosts, that alone poses an issue. What if you’re on holiday or unavailable during this time and cannot claim?

To issue a claim, you’ll need to report an incident to the resolution centre before you welcome another guest to your property and within the 14 days we just discussed. When you request your deposit, you’ll be able to claim for damages, missing items or unexpected cleaning costs.

You’ll need to submit documentation for your request showing the damage or missing property. This includes photos, videos, receipts/invoices, and links to comparable items to show cash value.

The guest must then agree to the reimbursement or dispute it and Airbnb will decide based on your documentation. Should they rule in favour of the host, the platform will collect the deposit from the account used for the guest’s holding charge. They will then issue a payment to your account.

What alternative is there to security deposits?

Security deposits, as you can tell from the above, aren’t complete protection. Getting money back from the guest also depends on how Airbnb favours you vs your guest. Remember that to claim for a deposit, you’ll need to:

  1. Manually submit your claim within 14 days of their stay if a guest, someone they invite or a pet causes damage.
  2. Await your guest’s response to see if they accept the claim or dispute it.
  3. If it’s disputed, you must then accept Airbnb’s judgement once issued.
  4. If your claim is successful, the guests card will be charged and Airbnb will issue payment. The guest can then appeal for 60 days following the decision.

While deposits give you some level of protection, it shouldn’t be considered a replacement for insurance. If any theft or damage outside of the Airbnb Host Damage Protection Terms occurs, you’ll be left out of pocket. Here at Pikl Insurance, we’ve designed insurance coverage for Airbnb hosts.

Instead of relying solely on either your guest’s honesty or Airbnb’s judgement, choose our cover and enjoy protections built entirely around hosts and their needs. To get a quote today, click on the link below.

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We offer insurance for Airbnb hosting, which includes cover for theft, malicious or accidental damage, public liability and more. By getting a quote you can compare prices for specialist cover across a panel of insurers.

Read more of our Airbnb guides

If you’re wondering how to become an Airbnb host, how to grow your business or want to learn more about hosting-specific topics, take a look at our 30+ Airbnb guides.

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Pikl Insurance Services Limited is a private limited company registered in England and Wales under company number 10449346 with registered office Suite B, 2nd Floor, The Atrium, St. Georges Street, Norwich, England, NR3 1AB. Pikl Insurance Services Limited is authorised and regulated by the FCA, firm number 773457.