Your Gulf Coast vacation rental is just like your own home, right? You put a lot of TLC into it. When someone treats it poorly, it can be quite frustrating.
As rental property managers in Fort Morgan, Gulf Shores, Orange Beach, Pensacola, and Perdido Key, we understand that property damages can be a constant concern for every host. These damages can range from minor and easily manageable to significantly troublesome, potentially leading to loss of income if repairs take too long.
Online Travel Agencies (OTAs) recognize these challenges and have systems in place to assist property owners in handling such issues. However, there is still a great deal of confusion in our market regarding damage claims, particularly in filing a claim on the OTA platform and effectively communicating your case to the moderators.
In this blog, we will provide you with comprehensive insights into damage claims, address the aforementioned confusion, and even share data from a rental property management company that is a partner in another market. Ultimately, we want to show you that damage claims are not as significant of an issue as many hosts often assume.
But, first things first…
How would you define a damage claim?
When guests book a vacation rental, they are required to follow specific rules and guidelines to ensure the proper care and respect of the property.
If a host discovers that their Gulf Coast rental property has been damaged during a guest’s stay or that objects are found missing after the guest leaves, the host can start a damage claim process. Typically, this process occurs through the OTA’s resolution center, an online platform where guests and hosts can address the issue with the guidance of moderators.
It’s important to note that not all guests have ill intentions. Some will promptly inform hosts if they accidentally damage something on the property and even offer to cover the repair or replacement costs. However, many guests might attempt to conceal the incident or, if they agree to cover the costs of repair and replacement, they often propose a lower amount than what the host might expect.
In cases where hosts and guests cannot reach an agreement, the OTAs step in as mediators. If the OTAs determine that the host is justified in making a damage claim, the platform will collect compensation from the guest, often by withholding a security deposit and transferring it to the host.
At Luxury Coastal Vacations, we charge guests a damage waiver fee that covers them for up to $1,000 worth of accidental damage during their stay. For any damage exceeding this amount, we take appropriate steps to recover the costs from the guest.
Damage claims are rarely a significant concern in the context of short-term rentals, but every host should know how to start one and present their case coherently. Pictured: Cypress Winds in Gulf Shores.
Insights: our partner’s findings on damage claims
One of our partners, a property management company of similar scale operating in a different market, has generously shared their Airbnb and Vrbo damage claims data for over 20,000 bookings with us.
The statistics and graphs below can provide valuable insights into the true nature of damage claims when managing a sizable operation.
Let’s delve into some key findings.
- Damage Claims per Platform
Our partner gets approval for roughly 60 to 70% of the damage claims filed, with a specific success rate of 68.29% on Vrbo and 56.75% on Airbnb. That’s a significant difference between the two platforms. On Vrbo, our partner secures approval for 11.52% more damage claims compared to Airbnb.
This shows that property owners or managers may have a better chance of getting their claims approved when listing their rentals on Vrbo compared to Airbnb.
As is clear from the chart above, damage claims are a minor issue. Our partner’s experience shows they happen in only 0.43% of all bookings on Vrbo and 0.71% on Airbnb. As you can see, these incidents are so infrequent that they almost don’t show on the chart.
If we consider Airbnb’s 0.71% rate as a reference point for an owner with 100 bookings in a year, this translates to less than one claim per year.
In simple terms, damage claims are not the norm, but they do happen, and understanding how to manage them is essential.
Damage Claims vs. Length of Stay
Our partner’s average booking duration is three nights, which explains the increase in damage claims associated with this length of stay. However, when we examine the statistics, it’s clear that shorter stays, typically one or two nights, have an equal or even higher frequency of damage claims compared to longer stays of seven nights or more.
This is intriguing, given that longer stays inherently provide more opportunities for incidents. Hosts who usually hesitate about short-term stays may find this particularly noteworthy, especially in Florida’s spring break culture.
- Damage Claims vs. Booking Windows
Booking windows can be a bit of a puzzle. It’s true that bookings made far in advance, like those 90+ days ahead, tend to have fewer damage claims. But, surprisingly, last-minute bookings with just a 10-day window don’t seem to cause many problems either. In general, whether folks book well ahead or at the last minute, it doesn’t look like the booking window has a strong connection to damage issues. That’s nice to know.
- Damage Claims vs. Rental Size
Like with booking windows, we can’t find a clear link between damage claims and rental property size. However, it appears that as the rentals become bigger, the value of the claims tends to rise. It’s essential to note, though, that the data lacks the granularity needed for definitive conclusions, and certain individual claims could be influencing the overall trend.
Also, it’s important to consider that damage claim rates may fluctuate depending on the season, location, and the characteristics of the renters. We’re talking about those spring breakers again…
Damage claims guide: how to file them?
Wondering about the process for filing a damage claim? Let’s get started right away.
- Filing a Claim on Airbnb
With Airbnb, you have different options for submitting a damage claim: you can either use the resolution center or choose Aircover, which involves a human assessment of the situation.
You can also start the process through the guest’s message thread by selecting “File a Request” under “Aircover for Hosts.”
Then complete the details.
You can also upload your documentation and fill in the information.
Useful tip: when specifying the item’s age as “less than a year” and pointing out that it needs replacement with “no,” you increase your chances of receiving the full amount you’re charging the guest for.
Once you’ve submitted this information, it will be sent to the guest.
They then have a 24-hour window to either accept or decline the charge. If this 24-hour period expires or if the guest declines the charge, you can click on “Ask Airbnb for Help” to request Airbnb to review the claim.
Always remember to provide as many details as possible, such as photos displaying the damage, receipts if you’ve already purchased a replacement, or screenshots of the replacement item showing its cost if you haven’t acquired it yet.
These details assist Airbnb’s staff in conducting their research to determine the actual value of the item.
Here’s an example:
Broken Item vs. Replacement item
Having both a dated “before” and “after” photo of the damaged item is ideal because they serve as evidence that the damage occurred during the guest’s stay.
Be aware that there’s a 14-day window after the guest’s check-out date for filing damage claims. If 14 days have passed, Airbnb will not accept the damage claim.
- Filing a Claim on Vrbo
Starting damage claims on Vrbo is a more straightforward process, but it’s important that you follow their document-upload instructions. Failure to do so may even lead to the deactivation of your listing.
To get started, find “Damage Protection” in the sidebar of the message thread.
Next, select “Report Damage” and specify the amount you intend to charge the guest. Be aware that upon submission, the guest’s payment method will be automatically charged.
Similar to Airbnb, complete documentation is important to substantiate your claim. If a guest disputes the claim you’ve filed, Vrbo will request the documentation to verify the charge.
A critical point to keep in mind is that if you cannot provide evidence of the damage, Vrbo may deactivate your listing.
Using Vrbo, you have a 30-day window after the guest’s departure to submit damage claims. Once this 30-day period has expired, you won’t be able to file a claim.
Using a PMS?
If you’re using a Property Management System (PMS) connected to Vrbo, you can choose to charge the credit card linked with the booking.
If you’re using Vrbo without a PMS, your only option is to make a claim against the damage deposit you’ve set up.
Distinguishing minor from major issues
Most of the time when damages happen, they tend to be minor issues that can be solved before the arrival of your next guest, things like:
- Broken dishes and glassware
- Stained sheets and towels
- A kitchen in need of some extra cleaning
- Spills, like wine on the carpet
- Occasional late check-outs that disrupt the cleaning crew’s schedule.
Although these minor issues may cause additional cleaning or replacement expenses, they are usually manageable. While they can be stressful, they are a regular part of the cost of doing business, and it’s wise to handle them with a light touch, without expending too much energy worrying about them.
It’s much wiser to save your energy for more substantial damages, which can occur from time to time. These may involve things like broken furniture, malfunctioning appliances, structural damage, or valuable items that have been stolen.
These are the issues that can lead to costly repairs or replacements and, in some cases, even affect your ability to host guests for a period.
Even in such cases, remember to maintain the same mindset: don’t take things personally; it’s just part of the business.
Damage Claims & Bad Reviews
Keep in mind that pursuing a claim can sometimes lead to negative reviews. If that happens, you do have the option to challenge the review with the OTA. However, be prepared to provide evidence that the review is unfair. This, unfortunately, can lead to even more challenges and frustrations.
What about wear and tear?
When dealing with damage claims, it’s important to have a reasonable basis. Some items naturally deteriorate over time, particularly when used repeatedly by many guests. That’s why hosts must consider the concept of ‘wear and tear,’ which denotes gradual damage. Examples of situations that fall under wear and tear include:
- Minor scuff marks on walls
- Aging furniture or appliances
- Residue from makeup left on hand towels or face washers
- Limescale buildup around the shower walls
- Tears in aging rugs or curtains
Let’s take a chair as an example. Wear and tear in a chair may encompass surface scratches, color fading, and fabric wear. These issues are considered normal and expected, typically not resulting from misuse or abuse of the chair.
It’s impossible to entirely prevent wear and tear in a rental property. However, regular maintenance and choosing high-quality, durable furniture and appliances can significantly reduce the likelihood of damage or costly replacements.
With routine maintenance and by selecting durable, high-quality furniture and appliances, you can decrease the chances of damage or the need for expensive replacements. Pictured: Beach Colony in Perdido Key.
Taking minor damages as ongoing expenses
Similar to hotels, hosts of short-term rentals on the Gulf Coast frequently encounter minor damages. It’s a common practice among hosts and property managers in the Gulf Coast to allocate a budget for addressing minor damages and general wear and tear.
One effective approach is to consider a slight increase in your nightly fee, just a few dollars, which can be sufficient to protect you from unforeseen financial impacts.
At Luxury Coastal Vacations, we recommend setting aside 5% of a host’s gross income for repair and maintenance expenses.
While it’s true that guests should be held responsible for any damage they cause, engaging in every battle to make them pay for minor issues is certainly not the best strategy for your long-term success and overall peace of mind.
Resolving major damages
In the world of vacation rentals, effective communication is paramount when addressing any kind of issue, and this also holds true for handling damage claims.
If a guest books your property through an OTA, it’s advisable to maintain communication with them via the platform to maintain a clear record of all interactions. During your exchanges, it’s important to maintain a polite tone, aiming to understand what occurred and inquire whether the guests are willing to cover the costs.
An approach that’s relatable and respectful usually leads to a straightforward resolution that benefits both parties. However, if this approach proves unsuccessful, and you are confident in your claim, hold on to their security deposit and start a complaint through the OTA’s resolution center. They have specialists and established procedures to take it from there, although you may still be required to provide evidence to support your claims.
Ask your cleaning staff to occasionally take photos of your property while they’re working. This will be useful if you need to make a claim with the OTA when a guest breaks something.
How to collect supporting evidence
The more details you have about what happened, the better your chances of getting your claim approved.
- Document the damages
When you inspect your property, take pictures or videos of the damages right away to have proof.
Close-up shots are helpful. It’s also a good idea to have “before and after” pictures. You can ask your cleaning staff to occasionally take photos of your property while they’re working. This will be useful if you need to make a claim with the OTA or an insurance company, or if you have to take legal action.
- Keep records of your conversations with guests
Communicate with your guests using official channels and try to understand the situation. If it’s appropriate, politely ask them to take responsibility for the damages and pay for the repairs.
- Gather information about extra costs
Collect invoices, find links to replacement items that show their prices, or get estimates from contractors. Online travel agencies will consider these details when deciding if you qualify for reimbursement and how much you should receive.
Handling damage with direct bookings
If you receive bookings directly from guests, it’s important to create a well-structured rental agreement and make sure you have a clear policy for handling damages. Experienced Gulf Coast property managers like us always collect government-issued identification from guests for added security.
With these precautions in place, if you ever encounter significant damage to your rental and the guest refuses to take responsibility or cover the repair costs, you’ll be in a better position to protect your interests.
In some cases, you may need to seek legal advice from an attorney experienced in rental property issues.
Other tips to minimize damage claims
You know what they say, “a problem avoided is a problem solved.”
Here are some ways you can avoid damage from happening in your rental:
- Set clear expectations. Tailoring your rental to attract families can help discourage parties. Also, if you don’t allow pets, communicate this clearly in your description and rules.
- Avoid leaving valuable or irreplaceable items in the rental. Furnish your rental with high-quality items, but pick objects that are also easily replaceable.
- Communication is also crucial to avoid damage. Building a good rapport with guests helps them understand that they’re staying in a privately owned rental, not a corporate hotel. Show them the personal touch, and they’re more likely to treat your home with care.
Dealing with damage claims for beach rentals in the Gulf Coast
Owning a beach rental in Fort Morgan, Gulf Shores, Orange Beach, Pensacola, or Perdido Key can be a rewarding experience, both financially and personally. Still, it’s important to know that issues may arise.
As we saw in the data above, damage claims are relatively rare, but when they do occur, being prepared and taking a level-headed approach are the best ways to handle them.
With that scratched out of your mind, you can truly focus on the good things that come with your beach rental.