On VRBO (and perhaps others) there is an option to either pay $79 for an insurance policy covering $3000 in damage to the property or place a deposit for the same amount:
Assuming that...
...is there any downside to saving the $79 and trusting that the credit card company will help you out with any disputes?
The obvious downside is that if you do somehow manage to damage the property then some or all of your deposit will legitimately be withheld, whereas if you're insured the insurance should cover it (assuming the insurers don't wriggle out anyway).
As with any non-compulsory insurance product it's up to you to decide if the protection is worth the premium, given your perception of the risks.
As mentioned in the comments, the question becomes whether you like dealing with your credit card company's dispute process or with the insurance company provided by the travel site. For myself, I've found that the credit card company takes more of a "we're on your side" stance than the insurance companies.
It's important to note also that this approach only works if you're booking within 60-90 days (depending on your credit card company's rules). Otherwise any dispute you have with the property owner will be too late to be handled by the credit card company.
Personal anecdote: I took this approach with our last vacation and saved the $79. The deposit was refunded and there was no need to dispute since there was no accident/damage while there.
