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Deposit Alternative Misconceptions

What’s true, what’s false, and everything in between

While insurance agreements have been used to maintain accountability between multiple parties for decades, insurance products that replace security deposits are a fairly new concept. That means there’s a great deal of misinformation out there about deposit alternatives; what they’re used for, who can benefit from them, and how they stack up 1:1 against cash deposits. Since deposit alternatives are here to stay, it’s important to do some mythbusting so owners can make the most informed choices possible.

For this one we can only speak for ourselves, but to be clear, you can submit any number of claims on a Rhino policy so long as the total dollar amount doesn’t exceed the dollar amount of coverage you chose when the resident bound their policy and moved in. If a resident is responsible for ten incidents of loss (which we really hope isn’t the case), and those ten incidents combined are all within the coverage amount outlined in the policy, owners that partner with Rhino are 100% permitted to submit a claim for every one of those incidents.

We’d respond to that by saying any provider who limits or encourages owners not to submit claims is quite simply not a deposit alternative. True deposit alternatives are responsible for protection from loss the same way cash deposits are and if there is an incident of loss, a claim is necessary and should be treated as such. No ifs, ands, or buts about it.

For some alternatives this is true, but Rhino is actually designed to lower barriers and increase financial flexibility for every renter, regardless of income or risk factors. To put it simply, if an applicant didn’t qualify for your property before Rhino, signing up for our program doesn’t make them automatically qualified. We actually try to remove ourselves from qualification conversations. Owners decide who they want to approve or reject, and we follow their lead accordingly.

That’s a problem for other deposit alternatives, but not for us. Rhino never pools coverage. Ever. Each policy accounts for dollar values of coverage individually and Rhino policies never interact with one another. We figured out early on in our product journey that insurance pools create precarious situations for owners, so we eliminated them from our surety bond model. You can read more about how we did that here.

We hear this a lot, and it’s another one where we can only speak for ourselves. At Rhino, owners are always protected even if residents stop paying their premium to us. Once the policy is bound at move-in, your coverage is active for the entire lease term.

If a deposit alternative provider gives owners the ability to create efficiency and drive value in ways that cash deposits can’t, the alternative is not only as good as cash on hand, it’s better. Not all deposit alternatives do this because some try to replicate the cash deposit closer than others. Property teams use Rhino to unlock advantages that a cash deposit could never provide, including submitting claims in the middle of the lease and multiple times per lease term, recouping losses from unpaid rent or excessive damage in an average of 4 days, and increasing resident retention at lease renewal. Check out this podcast to hear more about how Rhino performs better than cash.

sales@sayrhino.com

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Our mission is to give renters financial alternatives to afford the homes they want.

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