Glossary

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.

By Andrew Bate, Co-founderReviewed by Stuart BateUpdated September 14, 2026

Why this matters for property managers

Replacing deposits is usually the single largest checkout-conversion improvement a manager can make, and it removes the chargeback exposure that comes with withholding held funds. The trade-off is that a bare waiver caps what the manager can recover unless insurance sits above it — so the choice is really between a deposit, a standalone waiver, and a waiver program with an insured layer.

Related terms

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.

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.

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.

Browse every term in the insurance glossary for property managers.

Security deposit alternative: common questions

What is the best alternative to a security deposit for Airbnb?

For professional managers, a damage waiver program applied through the PMS so it covers Airbnb, Vrbo, and direct bookings identically. AirCover remains as a secondary backstop for Airbnb stays only.

Do guests prefer a fee over a refundable deposit?

Guests prefer certainty. A visible, modest fee is a known cost; a large hold that may take weeks to release is an unknown risk. Operators consistently report fewer abandoned checkouts and fewer support conversations after switching.

Read the full Velaris guide.

Vacation rental damage waiver program

Read the full Velaris guide.

Velaris vs. Truvi

Read the full Velaris guide.