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Glossary

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.

By Andrew Bate, Co-founderReviewed by Stuart BateUpdated

Why this matters for property managers

Most guest damage is small and predictable; the losses that matter are the rare $15,000 floods and the $40,000 fires. Property damage coverage is what keeps one of those from becoming an owner-relationship crisis, and the retention is what keeps it affordable.

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.
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.
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.
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.

Browse every term in the insurance glossary for property managers.

Property damage coverage: common questions

Does property damage coverage include guest damage?

In vacation rental programs, yes, subject to limits and exclusions. Standard homeowners and landlord forms often exclude tenant-caused damage.

What are typical limits?

Velaris program tiers run from $10,000 contents and $50,000 structure up to $20,000 contents and $1,000,000 structure per incident.

Related guides

Property damage insurance for property managers
Read the full Velaris guide.
Vacation rental damage waiver program
Read the full Velaris guide.

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