Home Price Protection Warranty

This was an article from CNBC about a home warranty to protect against housing price declines.  I am not suggesting you buy it nor do I know anything other than what is included in the article but that it was worth noting.  Here’s how the company describes it:

You purchase an EquityLock Home Price ProtectionTM contract that refers to a local index of housing values. If the index has dropped by the time you sell the house, we pay you the percentage of the index drop multiplied by the value of your home at the time you bought the Home Price ProtectionTM contract.

The transaction is structured as a contract, and not as an insurance policy; therefore the payment is made if the market index falls, regardless of whether you sell the home for more or less than you paid for it.

The cost of the warranty is anywhere from 1 1/2 to 3 percent of the value of the home, depending on your particular market and how volatile it may be. The company is regulated by the DC Risk Finance Bureau to insure against any losses as a business.