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Glossary

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.

By Andrew Bate, Co-founderReviewed by Stuart BateUpdated

Why this matters for property managers

The fee is the lever that decides whether a damage program is profitable. Set it too low and damage consumes it; set it too high and it shows up in booking conversion. Because it is charged on every reservation — including direct bookings that platform protection never touches — even a modest fee produces a predictable revenue stream that most operators can model to the dollar. It is also the number owners ask about first, so being able to explain how it was calibrated matters.

Related terms

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.
Premium
The premium is the price paid for insurance coverage, billed monthly, quarterly, or annually. In a guest damage program the guest's per-reservation fee plays the economic role of the premium for the damage layer.
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.

Browse every term in the insurance glossary for property managers.

Damage waiver fee: common questions

Can I charge a damage waiver fee on Airbnb and Vrbo bookings?

Yes. Managers add the fee through their PMS or as a listed fee on the platform, so it applies to every channel the same way. Velaris enrolls each confirmed reservation through the PMS regardless of where it was booked.

Is the damage waiver fee taxable?

Treatment varies by state and by how the fee is characterized in the rental agreement. Many jurisdictions treat mandatory fees as part of the taxable rent. Confirm with your tax advisor and mirror the answer in your guest terms.

Related guides

Vacation rental damage waiver program
Read the full Velaris guide.
Security deposit alternative
Read the full Velaris guide.
Program pricing
Read the full Velaris guide.

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