Ever since the housing market crashed, many homeowners have lost complete faith in using real estate as an investment towards their future. Insurance companies typically only protect your home from fire damage or natural disasters, but they are starting to see an emerging market for protecting the value of a home. One Ohio Company has decided to take the first step and offer the nation’s first real insurance policy to protect a primary residence against lost value. While the policy is only offered in Ohio, if the plan is successful, it will be offered nationwide. So what would this mean for the real estate market?

Well, many skeptics believe that the insurance may not be a worthy investment, since housing prices are so low, and are looking to bottom out very soon. However, projections have shown a predicted 3.6% loss in home value until mid-2012, when prices will hopefully stabilize.

While it may not make sense to experienced homeowners to insure a home at the bottom of the market, new buyers may be waiting on the sidelines for fear of buying and immediately losing value on their first property. Many brokers and Realtors agree that this may encourage those people to take the plunge, since they will be guaranteed at least partial protection.

The policy works like this: the insured home will have to sell for less than its protected value, and local home values must have declined as well. This is to protect the insurer in the case that a homeowner wrecked the house, or made unusual and undesirable changes to the home to make it lose value. If both the home and neighborhood have lost value, the homeowner can file a claim for the lesser of the two amounts. Claims are, however, limited to a maximum of 25% of the insured value and homes purchased within two years of the resale date are subject to a deductible.

While there are still some skeptics, the typical monthly premium is only an estimated $35-45, which is less than the cost of PMI or an HOA fee of many of the homes for sale in Denver CO. The executive vice president of marketing at Home Value Protection Insurance has also said they will be limiting any increase to no more than 5% to keep prices affordable. Just a short decade ago, the idea of home value insurance may have seemed ridiculous, but since the 2006 potential homeowners are needing more and more convincing to get back into the real estate market.

About PorchLight Real Estate: PorchLight Real Estate Group has the most experienced and knowledgeable Denver real estate agents in Colorado. For more information about homes for sale in Denver CO or specific neighborhood homes please visit www.porchlightgroup.com.