How to Choose a Home Equity Insurer

Home equity is an asset that homeowners hold dear. Therefore, the protection of equity is top priority. Just like auto insurance protects you against losing your car in a wreck, home equity insurance protects you from losing your equity during a market crash. Here are a few tips to help you find a home equity insurer.

Difficulty: Moderate

Instructions

1. Ask your realtor. They are not only in tune with the housing market in the area, but are also usually knowledgeable about the local real estate finance community. They can suggest an insurer or at least point you in the right direction.

2. Contact your homeowner's insurer. Because they are in the same business, your homeowner's insurer will know about home equity insurers in the area.

3. Consult a financial planner. Home equity insurance is basically hedging against a market downturn. A good financial planner who has contacts in the brokerage community can get you information on home equity insurance.

4. Broach the subject to your auto insurer. As they are in the same industry, they could potentially provide insight into not only the home equity insurers in the area, but also give you more specific tips on finding one.

Tips & Warnings

• Home equity insurance pays out after the homeowners sells, in the event of a market downturn. Home value doesn't matter; if the market plunges, the policy pays out despite capital gains or losses on the sale.