OKLAHOMA CITY--(BUSINESS WIRE)--Home Value Protection, the only insurance policy in the U.S. that protects homeowners from the devastating impact of declining home prices, becomes available to Oklahoma homeowners this week. With this policy, homeowners can shelter their investment in their home — the largest financial asset of most families — from the downward plunge in home prices that has plagued homeowners nationally.
Oklahoma is the second state in the nation where this groundbreaking insurance policy for owner-occupied, primary residences, is being offered by the Home Value Insurance Company, a licensed insurance carrier regulated by the Oklahoma Department of Insurance.
“With Home Value Protection, homeowners don’t have to worry that they could lose equity in their home or end up under water. For a very affordable premium, they can protect themselves from downside risk, while still benefitting from the upside when home values appreciate,” said Scott Ryles, CEO of Home Value Insurance Company.
The company introduced Home Value Protection in Ohio last year. According to Ryles, this innovative insurance is already protecting policyholders in hard-hit Ohio communities that experienced declines in home values of $1,600 on average in the third quarter of 2011. “Home Value Protection insurance is restoring consumer confidence in local housing markets, and we are now expanding coverage to other states,” he said.
“Until recently, Oklahoma has been fairly insulated from the massive downturn in housing prices,” said Ryles. “However, in the past year the average value of homes in Oklahoma fell by 2.5 percent. Home Value Protection insurance gives homeowners the ability to inoculate their home from the housing market flu before it hits by locking in their home’s value at current levels,” he said.
Local home values in Oklahoma City declined 2.8 percent and 3.1 percent in Tulsa, according to Fiserv statistics. This translates to an average loss in value of $3,900 for homeowners in Oklahoma City and $4,100 in Tulsa. The Oklahoma housing market has experienced numerous down cycles, many of which lasted several years. For example, between 1983-1988 home values fell 23 percent and prices did not recover until 14 years later in 1997.
“Nationally, the collapse in home values has wreaked havoc on families’ financial well-being because for most people, their home is the majority of their net worth,” said Ryles. “Homeowners have long been able to buy insurance to protect against events like fires and floods. Yet, historically, homeowners are more than twice as likely in any given year to suffer from a decline in home prices than they are to experience the typical hazards a homeowner’s policy covers, such as flood, fire or burglary,” he explained.
“Having to sell when home values are down can be just as devastating financially to homeowners as a fire, and now there is a way for homeowners to protect against that risk,” Ryles added.
Another benefit of this insurance is the flexibility it provides homeowners. “Many times a life event, such as a job transfer, divorce or growing family dictates the need to sell. A weak housing market is often coupled with poor economic conditions that can result in job loss and the need to relocate to find work. With Home Value Protection, homeowners have the flexibility to sell their home, even in a down market,” said Ryles.
Here is how Home Value Protection insurance works. If home prices decline in an area and a policyholder sells their home for less than the insured value, their policy protects against the loss. Homeowners can lock in today’s insured value for up to 10 years, providing them ongoing protection from an uncertain housing market. If home values appreciate, a homeowner can purchase a new policy with a higher insured home value.
Home Value Protection insurance protects homeowners at all stages of life:
- Homebuyers — Home Value Protection allows homebuyers to lock in their purchase price and insure their down payment from the risk of declining home values. As homebuyers pay down their mortgage, Home Value Protection protects the initial down payment, as well as the growing equity they are building in their home.
- Existing homeowners — Home Value Protection insurance safeguards the financial well-being of existing homeowners by protecting the savings they have invested in their home. When housing values drop, home equity is substantially diminished, and can disappear altogether. This, coupled with the need to sell, can create a financial crisis for homeowners.
- Near retirees — Those nearing retirement can protect the portion of their net worth invested in their home, which can be an integral part of their retirement and estate plans.
For a typical Oklahoma home, monthly premiums are from $20 to $25 a month. To track housing values, Home Value Protection insurance uses the Case-Shiller® Home Price Index, a leading industry measure that tracks local housing market performance.
Home Value Protection insurance is available from independent insurance agents in Oklahoma, directly through the company’s website: HomeValueProtection.com or by calling 1-866-576-0611. The company is building a network of more than 100 independent insurance agencies across the state who will be appointed to sell Home Value Protection insurance.
About Home Value Insurance Company
Home Value Protection insurance is a property and casualty insurance policy underwritten and offered by the Home Value Insurance Company. The Home Value Insurance Company is a licensed, admitted carrier in Oklahoma, regulated by the Oklahoma Department of Insurance, and is a wholly owned subsidiary of Home Value Protection, Inc. Home Value Protection insurance is not sponsored, endorsed, sold or promoted by Standard & Poor’s, Fiserv, or any of their affiliates, and they make no representation regarding the advisability of purchasing Home Value Protection insurance. Standard & Poor’s®, S&P®, Fiserv®, Case-Shiller®, and related trademarks used with permission.