How Does the Airbnb Security Deposit Work?
When you host someone through Airbnb, you take a risk. Sure, Airbnb does a lot to help you mitigate that risk, including verifying details for all guests on the platform and letting hosts review guests in order to keep them accountable for their behavior.
Still, there is a risk that a guest could damage something on your property. Rarely will a guest do this on purpose, but even accidents can still cost you. For this reason, some hosts will require a security deposit when guests book a stay at their property.
But how exactly do these security deposits work? Should hosts require them, or does doing so drive away potential guests? And what happens when a host makes a security deposit claim?
In this guide, we’ll give you the answers to these questions and more.
What Is the Airbnb Security Deposit?
If you’ve ever booked an Airbnb, you know that the nightly price of the listing isn’t the only thing you pay when you book. Most hosts also charge a cleaning fee, and then you also have to pay the Airbnb service fee. In some municipalities, hosts are also required to collect a separate short-term rental tax, and hosts may even offer extra services (such as laundry) for an additional fee.
In addition to these fees, you may notice that some properties require a security deposit. The amount of this deposit can range from as little as $100 to as much as $5,000. So what is the purpose of these security deposits?
Just like a security deposit that an apartment complex may require before you sign a lease, Airbnb security deposits help hosts cover any damages that you cause while on their property. For instance, if you accidentally knock over and shatter a vase, the security deposit will help pay for a new one.
The policy seems straightforward enough, but there are some important details to know about the way Airbnb implements it. Read on to find out how it works.
How Do Airbnb Hosts Collect a Security Deposit?
When people hear the term “deposit,” they probably think of an amount of money that you pay upfront and then receive back later after you meet certain conditions. While this is how most traditional security deposits work, Airbnb security deposits are a bit different.
When you book a listing with a security deposit, neither Airbnb nor your Airbnb host collects payment from you. Instead, Airbnb simply notes the amount of the security deposit. They do not charge or authorize your credit card for the amount.
This is reassuring to know as a guest since most people don’t have the liquid assets (or credit) to take a temporary charge of hundreds or even thousands of dollars. Even if you do have it, you may be hesitant to turn over that amount to a host who could then claim you broke something so that they can keep the whole amount.
In fact, Airbnb has a variety of policies in place to prevent hosts from abusing security deposits. But they also do their best to make sure hosts do receive security deposits when they make legitimate claims.
How Airbnb Handles Security Deposit Claims
So let’s say you’re an Airbnb host and a guest breaks a piece of furniture in your home. How do you go about making a security deposit claim?
The first thing to know is that you must make your security deposit claim within 14 days of the guest checking out or before the next guest checks in (whichever occurs first). This policy exists to prevent guests from getting wrongly blamed for damage that a previous guest caused.
Assuming you’re still within the proper time frame, your next step is to initiate a security deposit claim. This requires four steps:
- Visit the Airbnb Resolution Center
- Select the reservation for which you want to make a claim
- Click Select a reason then choose Request compensation for damages
- Click Continue
Once you’ve done this, Airbnb will ask you for detailed documentation of the damages. They’ll request photos, descriptions of what happened, and receipts for the damaged items (if you can provide them). This all helps Airbnb determine the item’s actual cash value and ensure that the amount you’re requesting is fair for covering the damages.
After Airbnb receives the above information, they’ll send a message to your guest, requesting the money. From here, things can go a couple of different ways. If your guest agrees to the amount, then Airbnb will charge it to the customer’s payment method and send it to you within 5–7 business days.
If the guest doesn’t agree to the charge or doesn’t respond, you should click Involve Airbnb within the Airbnb Resolution Center. Airbnb will then step in to help resolve the dispute. They’ll hear arguments and receive documentation from both parties. They resolve most security deposit disputes within a week.
Airbnb Security Deposit FAQ
To finish this guide, here are the answers to some common questions related to Airbnb security deposits.
Should Airbnb hosts require security deposits?
Ultimately, this is up to you as a host. There are pros and cons to requiring a deposit. On the positive side, requiring a security deposit shows guests that you’re serious about them respecting your property.
In this way, it can ensure that guests are careful, and deter guests who might be looking to do things that could damage your property. It also has the practical benefit of ensuring that you don’t have to pay for damages out of pocket if they do occur.
On the other hand, requiring a security deposit can intimidate guests. This is especially true because many guests don’t understand how Airbnb security deposits work. If a guest thinks that in addition to the accommodation fees, service fees, and cleaning fees, they’ll also need to fork over $1,000 that they may not get back, they may decide to look at another property.
The best approach is to experiment. If it appears that removing your security fee increases your number of bookings and doesn’t result in less respectful guests, then it may be best to remove it. On the other hand, if you’ve had issues with guests damaging your property and refusing to pay, then adding a security deposit could be a prudent decision.
What security deposit amount should I use for my property?
This depends on the house you have and what it contains. If you have extensive, carefully chosen decorations or a plush carpet, then you might want to have a security deposit of several hundred or even several thousand dollars.
On the other hand, if your property is quite basic and doesn’t have any expensive items, then it might make sense to require a deposit of a couple hundred dollars or no deposit at all.
How do security deposits differ from Airbnb insurance?
It’s important to mention that security deposits do not replace the insurance coverage that Airbnb offers to hosts. The relevant coverage for this discussion is Airbnb’s Host Guarantee.
Under this policy, Airbnb provides up to $1 million of damage protection for every property on Airbnb. This includes damage to any part of a listing, both accidental and intentional. As long as you can prove to Airbnb that you didn’t cause the damage yourself (or ask your guest to cause it as part of insurance fraud), Airbnb will cover the damage.
If you have Airbnb insurance, do you also need to require security deposits?
In some cases, yes. While Airbnb’s Host Guarantee will cover any damages up to $1 million, this policy mainly exists to cover serious damage. While it would theoretically cover something as small as wine spilled on your carpet, the idea is to cover more serious incidents, like a guest causing a fire or breaking your toilet and flooding your apartment.
For this reason, having a security deposit in place to cover smaller damages makes sense. It also usually takes less time to resolve security deposit claims than Airbnb insurance claims because all insurance claims require the involvement of a third-party claims administrator. If you’ve ever filed an insurance claim of any kind, you know that the process tends to be anything but quick and straightforward.
Security deposit claims, in contrast, can be resolved entirely within Airbnb, saving you lots of time and energy.
How do I add a security deposit to my Airbnb listing?
To add a security deposit to your Airbnb listing, follow these steps:
- Go to Your listings on airbnb.com and select a listing
- Click Manage listing
- Click Pricing settings at the top of the page
- Next to Extra charges, click Edit
- Under Security deposit, enter an amount between $100 and $5,000 USD
- Click Save
Aan Airbnb hosts request cash security deposits?
No, they cannot. Airbnb does not allow payments to occur outside their platform. This policy helps protect the security of both guests and hosts. If a host attempts to request a cash security deposit, guests should refuse and then notify Airbnb.
How can I avoid paying an Airbnb security deposit?
The best way to avoid a security deposit claim is to treat your host’s property with the utmost respect. Carefully read the house rules for the property, and ask your host if you have any questions. Be aware of your surroundings at all times, and note the location of easily breakable items.
Of course, accidents still happen. If you do break something, the best approach is to tell your host immediately and offer to pay for the damage. This way, you can avoid negative feedback from your host, which could hurt your ability to stay at future Airbnbs. As long as you’re polite and pay for broken items, your host should be accordingly professional and not retaliate against you with a bad review.
Airbnb Security Deposits Make Sense in Certain Situations
We hope this guide has helped you understand how security deposits work, why some properties require them, and how hosts can take steps to get security deposit payments when they need them.
It’s always unfortunate when a guest breaks something at an Airbnb, but the combination of security deposits and Airbnb’s Host Guarantee ensures that all damages are resolved in a way that’s fair to everyone involved.