- Real Estate
Insurance Protection for Your Home's Value
It's no secret that the real estate market is in serious trouble in most parts of the country. Declining home values, foreclosure, over-supply, sluggish demand and high unemployment rates continue to threaten the most important and largest investment most people have: the family home. As bleak as that picture sounds there is an insurance product that can help protect you from declining home values. It's called Home Value Protection Insurance and it is currently available to home owners in Oklahoma, Georgia and Ohio.
Here's how it works. In this scenario, you buy a home for $200,000 tomorrow and in five years you need to sell it because you are relocating for work. Unfortunately, over the past five years home values have continued to decline and the value on your house is now $175,000. You sell the house for that price and lose $25,000 in the transaction. If you carry Home Value Protection Insurance you can file a claim for your loss and recoup the $25,000.
Coverage costs around $20 per $100,000 per month and it does come with some conditions. Home values are based on the Case-Shiller® Home Price Index. Coverage is available only to an owner occupied primary dwelling. That can be a single family residence town house, condo or and multi-dwelling unit. The insurance will not cover rental homes, investment properties, mobile homes or seasonal residences. A 10% deductible applies the first year, 5% deductible applies the second year. There is no deductable after the second year.
The insurance is also available to current home owners but be aware that the policy is based on the current value of the real estate and not its purchase price. Selling your home and including a Home Value Protection policy in the sale, along with a home warranty, can give buyers protection and reassure that's difficult to find in the current real estate market. Consultant with your real estate agent and insurance agent to see if this policy might work to help protect your home's value.
For more information about this type of insurance you can visit Home Value Protection Insurance.