Anyone ever used an Insurance Bond instead of a Lease Deposit

[Reid Hanley]

I came across an ad for an apartment building in which the seller described that he used insurance bonds instead of security deposits.  This sounds interesting, but I'm sure there are other details to know about this approach.  The exact wording in the ad read as follows:

     "We also instituted a "no security deposit" program by using insurance bonds in lieu of deposits. These products allow the        tenant the option to pay a small monthly insurance premium to the insurer in lieu of a lump-sum full security deposit            payment at move-in. In addition to increasing rental incomes, these products give the landlord at least double the                amount of security vs a security deposit."

Anyone have any experience or input on this strategy?   I can only imagine having to file an insurance claim for repairs would probably be a longer and more painful process, but if increased coverage to the point you can actually recover the full costs of repairs it may be worth it?

Thanks BP!