Why Choose Home Equity Insurance?

Home equity insurance is insurance that protects the homeowner against a decline in the value of the property during uncertain economic times. The insurance is typically paid with a one-time, up front premium. The insurance benefit is only evident once the home is sold. If the market value decreased, the insurance leaves a borrower safe. This type of coverage is also called home value insurance.

Whether or not this protection is worth the expense depends on the homeowner's intentions with the home. If the owner never plans to sell, then the insurance is most likely a waste, since it can only be claimed at the time when the house is sold.

Even if you are able to sell the house for more than you owe on it, if the value of the home is less than it was when you bought the insurance policy, the policy will pay you the difference. The protection offered by this type of insurance can be meaningful, particularly if there is a risk that the property values in the neighborhood you are purchasing in might decline during the course of the time that you own the home.