These days, security deposits are going the way of the dodo bird. San Antonio property managers are phasing them out and replacing them with a much more cost-effective system called Rhino Insurance. As a potential tenant, you can rest easy knowing that Rhino is less stressful and means more money in your pocket.
In this blog, we'll address how Rhino insurance replaced security deposits, the benefits, and how it creates alternative financial solutions for tenants.
What is Rhino Insurance?
Rhino Insurance creates a property protection policy that replaces those massive security deposits that can cost potential residents hundreds of dollars on top of application fees. Instead, a tenant pays a small monthly fee to cover any damages to the rented property.
Is the Renter Still Responsible for Damages?
Yes, you are still responsible for damages to the property. However, instead of the money coming out of the security deposit, Rhino pays the property manager. They can then use that money to cover the costs of any needed repairs.
Once the property manager receives their money, the resident owes the remaining damage balance to Rhino instead of the landlord. Rhino Insurance acts as a kind of middleman that makes the move-out process faster and more efficient, as the policy already has money to pay for quick repairs.
When renters move into properties that accept Rhino, they only have to worry about a small fee on top of the rent instead of a significant sum of cash up front that they may or may not get back. This depends on if or how much damage there was to the property while they rented.
What Happens When a Resident Moves Out?
When a resident moves out of a property in which they paid a security deposit, what normally happens is they are refunded the money.
When Rhino Insurance is put into play, this happens:
- The resident moves in and agrees to pay the small damage protection fee on top of the monthly rent. (Rhino Insurance works similarly to other insurance companies.)
- If the tenant causes property damage, the owner makes a claim, and Rhino pays them out.
- The rental property owner can use the claim money to make repairs.
- The renter then owes Rhino money instead of the property investor.
Upon moving out, the tenant and Rhino will work out the remaining payment owed.
Rhino Insurance and Processing Property Damages
When you move out, you stop paying the Rhino fee along with the rent. If you caused damage, however, you still owe the required amount of money to Rhino, regardless of where you move.
The good news for the tenants that owe damages is that Rhino doesn’t expect it to all be paid upfront. Instead, tenants can set up a payment plan with them.
Accidents happen—that's why this system works so well. With the security deposit system, there is more likely to be a conflict between the resident and the property owner, even if the damages were unintentional. Here, Rhino acts as a mediator that ensures things go smoothly for both the renter and landlord.
Why Replace Security Deposits?
Imagine this: you’re new in town with a new job that starts in a few days. You’re looking for an apartment and find the perfect place—it’s in a nice location, and the rent is affordable.
However, one look at the security deposit shows that it is so much that it effectively doubles your first rental payment! Because you’re so new to the area, you may not have the funds to pay two installments of rent at once, so you are forced to keep looking.
Security deposits can be a huge hassle for property owners as well. Depending on the area, there may be different rules that complicate the issue, such as the window of time in which they can claim their tenant’s deposit.
On the other hand, properties that accept Rhino are much more appealing to residents because they don’t have to worry about paying a huge lump sum on top of their first rent payment.
Real estate investors prefer Rhino, too, because the policy ensures a payout no matter what damage may happen. Since it is an insurance company, there are claim advisors that can mediate disagreements.
Does Rhino Insurance Offer Refunds?
Unlike a security deposit, Rhino Insurance is a service that is paid for at regular intervals, so there are no refunds for tenants. If residents move out of any properties that accept Rhino, they no longer pay for the service on top of the rent, but they also do not receive anything back like returning a security deposit.
Our San Antonio Property Managers Have Properties that Accept Rhino
MHN Property Management has several rental properties that accept Rhino Insurance. These properties can help mitigate any fiscal struggle you may be having and that could have eliminated properties with hefty security deposits in your search.