Security Deposit Alternatives: Deposit Insurance and Replacement Products
Security deposits are friction: tenants hate handing over thousands upfront, and landlords hate administering, holding, and refunding them. Deposit alternatives promise to eliminate the cash deposit entirely. Here's how the real products work — and the catch most marketing glosses over.
How deposit alternatives work (the three models)
Every product in this space replaces the tenant's cash deposit with something else. There are three structures, and the difference matters enormously:
1. Billing authorization (Obligo): the tenant authorizes charges against their bank account or card up to the deposit amount. No cash changes hands upfront.
2. Surety bond (Jetty, SureDeposit, TheGuarantors): a surety company guarantees the deposit amount to the landlord. If there's damage, the surety pays the landlord — then collects from the tenant.
3. True lease insurance (LeaseLock): an insurance policy covers the landlord's losses. The tenant pays a monthly fee and — uniquely — owes nothing back after a claim.
The critical distinction: in every model except LeaseLock, the tenant still owes for actual damage. The fee is non-refundable, and if the company pays the landlord a claim, the tenant must reimburse it. It's not free money — it's a different way to guarantee the same obligation.
The products, verified
Obligo — billing authorization
The tenant links a bank account (via Plaid) or card and authorizes charges up to the deposit amount. The landlord holds a guaranteed payment method instead of cash — no deposit account to manage, no refund to process. At move-out, the landlord can charge for damages or unpaid rent; Obligo pays the landlord and collects from the resident, who can repay in interest-free installments. The tenant pays a non-refundable service fee (a percentage of the deposit, set by underwriting). Offered through partner properties, with integrations into RealPage and AppFolio.
Rhino + Jetty — deposit insurance (merged June 2025)
Rhino and Jetty merged in 2025 to form the largest deposit-alternative company in the US market, now operating co-branded. The tenant pays a non-refundable premium — starting around $4/month for Rhino's insurance model, or from $7/month per $1,000 of protection for Jetty's surety-bond model. Coverage equals the traditional deposit amount. If the landlord files an approved claim, the company pays it — but the tenant is responsible for reimbursing the approved amount. Claims can be filed mid-lease and up to 60 days after the policy ends. Available only at partner properties.
LeaseLock — true lease insurance
The standout structure: genuine insurance with no post-tenancy debt collection against the renter. Tenants pay a monthly fee starting around $19/month for $5,000+ in coverage per lease; the property gets insurance-backed protection against rent loss and damage, with no qualification barriers for renters. LeaseLock has secured over $17 billion in leases and operates nationwide across multifamily and single-family operators. If you want the cleanest "no deposit, no debt" story for tenants, this is it.
SureDeposit (Assurant) — the original surety bond
Operating since 2000 — the oldest product in the space. A voluntary surety bond backed by American Bankers Insurance Company of Florida (an Assurant company). The tenant makes a one-time, non-refundable premium payment for the life of the tenancy instead of a cash deposit. If the tenant doesn't fulfill lease obligations, the surety reimburses the landlord — and the tenant must reimburse the surety. Offered at participating communities nationwide.
TheGuarantors — surety bond
Best known for its lease-guarantee product, TheGuarantors also offers a deposit-replacement surety bond covering what a traditional deposit covers (unpaid rent and utilities, damage, fees). Applicants pay a non-refundable premium — typically a percentage of one month's rent — and remain liable to the surety for paid claims.
The catch: check your state law
Some states regulate or restrict deposit alternatives — a few require landlords to still offer the traditional cash-deposit option alongside any alternative, and state insurance departments oversee the surety and insurance products. Before offering any of these, confirm the product is approved for use in your state and that your lease language matches the product's requirements.
Should you offer one?
The landlord case: faster lease-ups (lower move-in cost converts more applicants), no deposit accounting, no refund disputes, no separate bank account requirements. The cost falls on the tenant, not you.
The tenant case: lower move-in cost — a $50/month fee beats a $2,000 deposit for a cash-strapped applicant. But the fee is non-refundable, and in every model except LeaseLock the tenant still owes for real damage. Make sure applicants understand that before they sign.
The honest math: a traditional deposit costs the tenant $0 in the end if they leave the place clean — they get it back. A deposit alternative costs a non-refundable fee they'll never see again. For great tenants, the old-fashioned deposit is the better deal. For tenants who can't produce a lump sum, alternatives open doors that would otherwise stay closed.
The bottom line
Deposit alternatives are real, operating products — not vaporware — and the category consolidated in 2025 around Rhino + Jetty, LeaseLock, and Obligo, with SureDeposit and TheGuarantors in the surety niche. They solve a genuine problem (move-in affordability) and a genuine landlord headache (deposit administration). Just go in clear-eyed: except for LeaseLock's true insurance, the tenant still owes for damage, the fee never comes back, and your state may have rules about how you offer them.