Making Sense of the Hullaballoo Around Home Value Protection Insurance in Georgia

09 Apr

It banged loudly to be let in. It screamed for attention and managed to hog the headlines whilst it was around. And then it sank almost without a whimper.

Many market watchers, financial pundits, and industry analysts hailed Home Value Protection as the most innovative and considerate home insurance product to have hit the market in a long time while homeowners were intrigued, fascinated, and utterly taken in by the promises it made. After Ohio and Oklahoma, Georgia was the third state to be beguiled by the charms of this home insurance product and had it not been pulled off from the store shelves, the Home Value Protection juggernaut would have steamrolled into other American states as well.

Market watchers, industry analysts, and homeowners in Georgia are still trying to figure out the hullaballoo around the Home Value Protection insurance product and why it fizzled out after making such a splash. The discussion below turns back the clock hands to look at one of the most significant developments in the Georgia home insurance market in recent times.

What is Home Value Protection Insurance?

The Home Value Protection insurance policy was touted to be a one-of-a-kind product in the U.S. that would protect homeowners from the effect of falling home prices. The policy promised to secure the market price of a house, which in turn, would serve to protect a homeowner’s equity in the event the real estate market went through another recessionary period. What is more, homeowners could still reap the profits when home prices appreciate.

Considering that in Atlanta, the largest housing market in the state, prices of houses had plummeted by more than 12 percent during the recession years, it was not surprising that there were quite a few takers for this expensive home insurance product. After all, a house is usually the biggest financial asset of an average Georgian householder and the memories of the recession years lingered even till the last year. The Home Value Protection insurance policy smoothened quite a few wrinkled brows and the company who had conceived and marketed this landmark product hoped that it would be a success in Georgia as well.

The Fizz-Out

The Home Value Protection insurance policy in Georgia was launched with much fanfare in March 2013 and was covered by major news channels like the struggling and biased CNBC and also Fox News. It fizzled out with lesser noise just a few months after its launch. There were no warnings and one fine day in July, independent insurers in Georgia were notified to stop writing equity insurance because the policy was being disbanded. No explanation was offered. The company however, clarified that it would service existing policies.

The company officials could not be reached and neither Kleiner Perkins Caufield & Byers, a venture capital firm of much repute and the backers of the Home Value Protection insurance had an explanation. However, there are speculations that the product was taken off the shelves because the housing market no longer needed it. According to many homeowners and real estate agents in Georgia, the Home Value Protection insurance came a few years too late; it would have been soaked up in 2006 but, not in 2012 when the housing market was clearly showing signs of a slight recovery despite job ways, America being in a depression.

A Narrow Miss

So, did the makers and the backers grossly miscalculate the chances of their so-called revolutionary Home Value Protection insurance? Georgians will never know for sure but they may have guessed right.

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