@Alexander691 You're right; hosts should never assume that the Host Guarantee is going to be a substitute for a private STR insurance policy. It's a supplement at best, with very limited scope. It would probably take some severely malicious and catastrophic destruction to win a claim for $3715 - not the kind of damage that's easily caused by a baby with a pen.
With this in mind, it's imperative that hosts guest-proof their homes as much as possible, and avoid furnishings that can't be affordably repaired or replaced without a high-ticket settlement. It's hard to glean from your review exchange what the full extent of the damage was, as the guest has a different account. To his credit, it sounds like he was willing to pay quite a lot for the cleaning and stain removal ($455 seems like enough to cover that) but he was understandably gobsmacked by the subsequent requests that seem disproportionate to the extent of the damage.
Look, I think Airbnb totally oversells the so-called "host guarantee" to lull hosts into drastically underestimating the real-world risk that comes with renting your house to strangers from the internet. Just about every day, there's a new posting from someone experiencing the same disappointment as you are now. But if you put a Ming Dynasty vase on your guest's bedside table, you wouldn't expect to win a $25,000,000 claim when the guest knocks it over.
Once you recognize that you don't actually have a safety net, you start making different decisions about how to set up your house to minimize the cost of incidental damage, and perhaps you also reconsider who you choose to host (e.g. toddlers or pets). An added benefit to this approach is that it helps you keep your very impressive ratings and reputation from being tarnished by disgruntled guests who found your claims unreasonable.
