What renters need to know about surety bonds

Surety bond products have already replaced traditional security deposits for renters in millions of homes across the country. This cutting edge form of insurance provides more security for landlords, but also benefits renters by giving them quicker access to housing and more financial freedom than before. 

What is a rental surety bond? 

Put simply, surety bonds are an insurance contract between three parties:

1. The principal 

2. The surety 

3. The obligee 

For renters who use Rhino’s security deposit insurance, the surety bond contract looks like this:

Renters (the principal) pay Rhino (the surety) to protect the property owner (the obligee) with insurance coverage in lieu of a traditional cash security deposit. So instead of paying $1000 upfront as a deposit, renters purchase Rhino’s less expensive insurance policy that provides the same or more protection to the rental unit depending on the property owner's needs.

Security deposit insurance does not change renter responsibility. If you damage your home or skip out on rent, you’ll still be financially responsible. In this way, surety bonds function just like other well-known types of insurance.  

This comparison helps make it even clearer: 

Say you’re driving to work and you’ve always taken the same toll road. Imagine now that a company has opened a nearby superhighway and charges you a smaller toll to drive on it than what you were paying before. The new route is more efficient and more convenient, but your behavior on that highway should still stay the same (no speeding, use your turn signal, etc) because you’re still responsible for the rules of the road! Surety bond products are just a new and improved route to move in, letting renters unlock added benefits for a small monthly fee*.

What does a surety bond cover exactly?

Surety bonds—like Rhino’s security deposit insurance—share a common purpose with traditional cash security deposits: to reimburse property owners for unpaid rent and excessive damage to the home. However, surety bonds are less expensive than traditional security deposits.

Surety bonds also have transparency built into their insurance model. Instead of paying a cash security deposit and wondering if you’ll ever see it again or if you’ll get it back in its entirety, renters pay for incidents (if they happen) through Rhino directly. This gives you complete insight as to what you’re being charged for if a claim for excessive damage for unpaid rent is submitted by your property. This isn’t the case with many other deposit alternatives and it definitely isn’t the case with traditional security deposits. 

Some renters find it helpful to read what we tell property owners directly about how Rhino will protect them and their renters.

How Rhino insurance helps renters save money 

Rhino is the most affordable option for renters looking to move in and our easy-to-use digital platform makes it so renters can always have visibility into their insurance policy.  Building Rhino’s security deposit insurance using a surety bond allowed us to create product features that help renters while maintaining protection for landlords.

Here are a few examples:

• Rhino’s security deposit insurance factors your  financial information to help you and millions of other renters get the lowest price possible.

• If you sign up for Rhino, your property can’t ask you to pay an additional cash security deposit. 

• The cost of your Rhino policy depends partially on your credit history. If your credit score goes up and you’re renewing your Rhino policy at the end of your lease, we’ll calculate a  new price that could be even lower than before.

• Your credit will never stop you from being able to get a Rhino policy. While credit may impact price, if you’re approved to move in by your property, we’ll follow their lead and approve you as well. 

How do claims work?

Rhino’s claims process is entirely unique. It gets rid of the deposit hassle after move-out, freeing renters and owners from the back-and-forth about deposit deductions and refunds.

Our claims process works very similarly to other insurance products. An incident happens, a claim is submitted, and renters reimburse us after we pay owners on their behalf for what happened. Like we mentioned above, an added benefit for us and our renters is that the surety bond guarantees transparency for renters during incidents. Our security deposit insurance also enables renters to advocate for themselves when issues arise. Even still, be sure to pay your rent on time and avoid causing damage to your unit to avoid claims altogether. 

Here’s the Rhino claims process, step-by-step:

1. The property manager files a claim with Rhino, specifying the reason for the exact amount. 

2. The renter is notified that the claim has been submitted with an explanation.

3. Renters are allowed to dispute the claim and can always tell their side of the story.

4. Rhino evaluates the claim again before approving or denying it.

5. If a claim is approved, Rhino pays the property owner for the amount listed.

6. Renters then owe Rhino that amount with no interest fees or accruing interest.

Surety bonds help renters unlock value during their move. This insurance works for renters and landlords because it provides protection from incidents through a fair claims process, and gives renters the best deal at the same time. 

For renters specifically, lowering the upfront cost of moving can change their lives, enabling them to save hundreds or even thousands of dollars. Security deposit insurance can give them more agency to do what they want with their money. Security deposit insurance is widely regarded as the future of renting in America and at the end of the day, we work to give renters the most options possible. Surety bond insurance helps us introduce those options to the deposit transaction and beyond.

Curious to learn more about Rhino, or have questions about Rhino policy? Learn more at sayrhino.com. 

*Pricing will vary by individual renter. Actual rates determined based on the specific information provided to Rhino. Monthly payment plans may not be available to all renters.

Larenz Brown

Larenz Brown is a copywriter at Rhino who wants to tell stories that empower people. He once engaged in a 365-day staredown with a security deposit and emerged victorious.