Resources
Insurance glossary for property managers
Insurance has a jargon problem. Here's every term you'll see in your policies, explained in plain language by people who actually work in property management insurance. Each term has its own page with why it matters, a worked example where useful, and the questions we get asked most.
What this glossary covers, and how to use it
Vacation rental insurance borrows vocabulary from three places at once: the guest-facing world of damage waivers, security deposits and platform programs like AirCover; the commercial-insurance world of general liability, occurrence limits and retentions; and the compliance world of permits, certificates of insurance and additional insureds. The 42 terms below are the ones that actually appear in a property manager's policies, management agreements and city permit forms.
Every term has its own page with a plain-language definition, why it matters to a property management business specifically, a worked example where numbers help, and the questions we hear most. Terms link to each other, so you can start from whichever word your broker, owner or city clerk used and follow the thread. If you are choosing between a deposit and a fee, start with the featured terms; if you are reading a policy, jump to the letter.
Start with the terms that drive the decisions
Damage waiverA damage waiver is a non-refundable fee a guest pays at booking — typically $69–$199 per reservation for vacation rentals — in exchange for being released from liability for accidental damage up to a stated limit. Unlike a security deposit, the guest never gets the fee back, and the property manager keeps it as revenue.Security deposit alternativeA security deposit alternative is any mechanism that protects a vacation rental against guest damage without holding refundable guest money. The most common is a non-refundable damage waiver ($69–$199 per reservation); others include per-stay damage insurance sold to the guest and platform protection programs.Damage protection (vacation rental)Vacation rental damage protection is any arrangement that pays for guest-caused damage to a property: a guest-paid damage waiver, a per-stay damage insurance policy, platform programs such as Airbnb's AirCover or Vrbo's damage protection, or a refundable security deposit. The terms describe different mechanisms, not one product.Self-insured retention (SIR)A self-insured retention is the amount of loss a business agrees to handle itself before its insurer becomes involved. It resembles a deductible, but with a deductible the insurer manages the claim from the start; with an SIR the insured manages and pays claims until the retention is reached.Certificate of insurance (COI)A certificate of insurance is a one-page document that proves an insurance policy is in force, listing the named insured, coverage types, limits, effective dates, carrier, and any additional insureds. Homeowners, HOAs, lenders, and city permit offices routinely require one from property managers.General liabilityGeneral liability covers third-party bodily injury and property damage claims. If a guest trips on a loose step and breaks an arm, general liability pays the medical bills and defends any lawsuit.
A
- Actual cash value (ACV)
- Actual cash value is the replacement cost of damaged property minus depreciation. If a five-year-old couch is destroyed, ACV pays what a five-year-old couch is worth today, not what a new one costs. Read more →
- Additional insured
- An additional insured is a person or company added to a policy who receives some of the policyholder's coverage benefits. Property managers commonly add homeowners, HOAs, and municipalities as additional insureds on their liability policy. Read more →
- Aggregate limit
- The aggregate limit is the maximum total an insurance policy will pay across all claims during the policy period, usually one year. Once the aggregate is exhausted, further claims are not covered until the policy renews. Read more →
- AirCover for Hosts
- AirCover for Hosts is Airbnb's platform protection program for hosts, combining Host damage protection and Host liability insurance for stays booked on Airbnb. It is a platform benefit administered by Airbnb, not a policy the host owns, and it applies only to Airbnb reservations. Read more →
B
- Business interruption insurance
- Business interruption insurance replaces lost revenue when a covered event — fire, storm, major damage — takes a property offline. For property managers it covers the rental income lost while a home is repaired, and can extend to the manager's commissions on that income. Read more →
- Business owner's policy (BOP)
- A business owner's policy bundles general liability and commercial property insurance for a business's own operations — its office, equipment, and employees — into one policy. It covers the property management company, not the rental properties it manages. Read more →
C
- Care, custody or control (CCC)
- Care, custody or control is an exclusion in general liability policies: the policy does not pay for damage to property that is in the insured's care, custody or control, such as a home a property manager operates on an owner's behalf or a guest's belongings left in it. Damage to that property has to be covered by a property policy, a damage program or a specific endorsement. Read more →
- Certificate of insurance (COI)
- A certificate of insurance is a one-page document that proves an insurance policy is in force, listing the named insured, coverage types, limits, effective dates, carrier, and any additional insureds. Homeowners, HOAs, lenders, and city permit offices routinely require one from property managers. Read more →
- Claims-made policy
- A claims-made policy covers a claim only if both the incident and the claim occur while the policy is active. If the policy lapses and a claim arrives later for something that happened during the covered period, a claims-made policy without tail coverage will not respond. Read more →
- Commercial general liability (CGL)
- Commercial general liability is the foundation of business liability coverage, protecting against third-party bodily injury, property damage, and personal or advertising injury claims. For property managers it responds when a guest slips on a wet deck or a vendor damages a neighbor's fence. Read more →
D
- Damage Control
- Damage Control is Velaris's per-reservation guest damage program. Guests pay a damage fee at booking, the property manager keeps the fee revenue and retains predictable damage up to a chosen retention, and insurance responds above it. Velaris administers enrollment, escrow, and claims for a flat $9 per reservation plus the actual damage. Read more →
- Damage protection (vacation rental)
- Vacation rental damage protection is any arrangement that pays for guest-caused damage to a property: a guest-paid damage waiver, a per-stay damage insurance policy, platform programs such as Airbnb's AirCover or Vrbo's damage protection, or a refundable security deposit. The terms describe different mechanisms, not one product. Read more →
- Damage waiver
- A damage waiver is a non-refundable fee a guest pays at booking — typically $69–$199 per reservation for vacation rentals — in exchange for being released from liability for accidental damage up to a stated limit. Unlike a security deposit, the guest never gets the fee back, and the property manager keeps it as revenue. Read more →
- Damage waiver fee
- The damage waiver fee is the per-reservation amount a guest pays for a damage waiver. In professionally managed vacation rentals it usually runs $69–$99 for lower-ADR properties and $99–$199 for higher-ADR properties, charged at booking on every channel. Read more →
- Declarations page
- The declarations page is the first page of an insurance policy. It lists the named insured, policy number, coverage limits, deductibles, premium, and policy period — the summary that answers 'what does this policy cover, and for whom?' Read more →
- Deductible
- A deductible is the amount the policyholder pays out of pocket on a claim before insurance pays. A $1,000 deductible on a $5,000 claim means the insured pays $1,000 and the insurer $4,000. Higher deductibles generally mean lower premiums. Read more →
E
- Endorsement
- An endorsement is an amendment to an insurance policy that adds, removes, or changes coverage — adding pet damage coverage, extending liability to a new property, or naming an additional insured. It is also called a rider. Read more →
- Errors and omissions (E&O)
- Errors and omissions insurance is professional liability coverage for claims arising from mistakes or failures in professional services. If a homeowner sues a property manager for failing to maintain adequate insurance on their property, E&O responds. Read more →
- Event liability insurance
- Event liability insurance covers third-party bodily injury and property damage arising from an organized gathering — a wedding, retreat, or party — at a vacation rental, at limits selected for the event. It fills the gap left by host policies and platform protection, which typically exclude events. Read more →
- Exclusion
- An exclusion is something a policy specifically does not cover. Common exclusions include flood, earthquake, intentional damage, wear and tear, and — in most homeowners policies — commercial short-term rental activity. Read more →
G
- General liability
- General liability covers third-party bodily injury and property damage claims. If a guest trips on a loose step and breaks an arm, general liability pays the medical bills and defends any lawsuit. Read more →
H
- Homeowners policy
- A homeowners policy is standard residential insurance for an owner-occupied home. Most homeowners policies exclude commercial activity, so they do not cover claims arising from short-term rentals — one of the largest coverage gaps in the vacation rental industry. Read more →
I
- Indemnity
- Indemnity is the principle of restoring the insured to the financial position they held before a loss. Insurance makes the policyholder whole; it does not make them better off, which is why a $200,000 property cannot be insured for $500,000. Read more →
L
- Liability
- Liability is legal responsibility for injury or damage to someone else. If a guest is hurt at a property and the owner or manager is found liable, they are responsible for the guest's medical costs, legal fees, and any settlement or judgment. Read more →
- Liability Control
- Liability Control is Velaris's liability program for managed properties. Every home in a manager's portfolio is enrolled in liability coverage at onboarding, with limits from $100K to $1M per occurrence and an opt-out for owners who show equivalent coverage. Read more →
- Loss ratio
- The loss ratio is the share of premium an insurer pays out in claims. A 60% loss ratio means $0.60 in claims for every $1.00 of premium collected. Read more →
M
- Medical payments coverage (MedPay)
- Medical payments coverage is a sub-limit within a liability policy that pays small medical bills for injured guests regardless of fault. If a guest cuts a hand on a broken glass, MedPay covers the urgent-care visit without a lawsuit. Read more →
N
- Named insured
- The named insured is the person or company listed on a policy as the primary policyholder, with full rights to file claims, add endorsements, and cancel coverage. Read more →
O
- Occurrence-based policy
- An occurrence-based policy covers any incident that happens during the policy period, regardless of when the claim is filed. Damage in January that is claimed in June — even after the policy expires — is still covered. Read more →
P
- Per-occurrence limit
- The per-occurrence limit is the maximum a policy pays for a single claim or incident. With a $1,000,000 per-occurrence limit, no single claim can exceed $1,000,000 even if the aggregate limit is higher. Read more →
- Property damage coverage
- Property damage coverage pays to repair or replace structures, contents, appliances, and furnishings damaged by a covered cause, including guest-caused damage. It is the insured layer that sits above a damage waiver program's retention. Read more →
R
- Replacement cost
- Replacement cost is the amount needed to replace damaged property with a new item of similar kind and quality, without deducting depreciation. It pays more than actual cash value and usually carries a higher premium. Read more →
S
- Security deposit
- A security deposit is guest money — typically a $500–$1,000 hold or charge — collected before a stay and returned afterward if no damage is found. Recovery is capped at the amount held, and withheld deposits are frequently contested through chargebacks or platform arbitration. Read more →
- Security deposit alternative
- A security deposit alternative is any mechanism that protects a vacation rental against guest damage without holding refundable guest money. The most common is a non-refundable damage waiver ($69–$199 per reservation); others include per-stay damage insurance sold to the guest and platform protection programs. Read more →
- Self-insured retention (SIR)
- A self-insured retention is the amount of loss a business agrees to handle itself before its insurer becomes involved. It resembles a deductible, but with a deductible the insurer manages the claim from the start; with an SIR the insured manages and pays claims until the retention is reached. Read more →
- Short-term rental insurance
- Short-term rental insurance is commercial coverage for properties rented nightly or weekly through Airbnb, Vrbo, or direct booking. It covers the risks homeowners and landlord policies exclude: guest liability, guest-caused damage, and lost booking revenue. Read more →
- Subrogation
- Subrogation is the insurer's right to recover what it paid on a claim from the party responsible for the loss. If a vendor causes damage and the insurer pays, the insurer may pursue the vendor to recover the payment. Read more →
- Surplus lines
- Surplus lines insurance is coverage placed with carriers not licensed in the insured's state but approved to write risks the standard, admitted market will not. Many short-term rental products are written on surplus lines because admitted carriers have not caught up with the category. Read more →
U
- Umbrella policy
- An umbrella policy adds a layer of liability coverage above underlying policies. If general liability pays its $1,000,000 limit and a lawsuit demands $1,500,000, the umbrella covers the remaining $500,000. Read more →
- Underwriting
- Underwriting is the process an insurer uses to evaluate a risk and decide whether to offer coverage and at what price. Underwriters weigh portfolio size, locations, claims history, property types, and risk-management practices. Read more →
W
- Workers' compensation
- Workers' compensation insurance covers medical expenses and lost wages for employees injured on the job. If housekeeping or maintenance staff are hurt at work, workers' comp responds. It is required in most states once a business has employees. Read more →
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