I have to respectfully disagree with makin_tracks about it not being contagious. It actually is
contagious from horse to horse and spreads very easily by touch. This is why its so imperative to wash all your blankets, brushes, etc. that have touched the affected area.
Rain rot isn't life-threatening or extremely serious, but it is discomfiting for the horse, especially since you have to peel off the scabs. When my horse had this, I used Mane & Tail Anti-Microbial Shampoo. Since its a fungal infection, you need an anti-microbial or anti-fungal solution. First I wet the area, lathered in the shampoo, let sit for 10 minutes and then rinsed. When the scabs are soft you have to gently pick them off. Its a messy ugly process, but if you take care of it daily, it heals pretty quick.