We insure our cars and our homes - but what about insuring the value of our homes? A new insurance product designed to be a hedge in case the price of your house goes down promises to cover you. But do you really need it?
The Reville family is relieved that they've somehow fared better than most in an unreliable housing market.
Matt Reville says, "There are plenty of neighborhoods around us that have lost value considerably. We know plenty of people who've lost money on the sale of their homes."
Home Value Protection Company now lets people lock in the value of their home.
Teri Felix works for HVPC. She says, "Take a $200,000 home...market's down 10 percent...lost $20,000 in the value of their home...we'll send them an insurance payment for $20,000 to cover that gap."
The cost for coverage? About $40 per month. Felix says that's "less than a tank of gas these days."
Homeowners have to have the policy for at least two years to avoid steep deductibles. And it's important to point out you're not going to recoup what you've already lost, but don't have to worry about repeating recent history.
Felix says, "It's a win-win - if the housing market goes up they win on the upside and if the housing market goes down they're protected on the upside."
But in the $200,000 home scenario, getting $20,000 when you sell your depreciated home will cost you nearly $1,000 in insurance premiums.
"Just like paying into fire insurance, if you never have a fire, that's invested money you don't get back," adds Felix.
Essentially, the people at Home Value Protection are selling people like Matt Reville an investment in peace of mind during a volatile housing market.
Matt Reville says, "When the time comes to sell our home, we'll get the money out of it that we put into it."
