Home Equity Insurance- Protects against loss of equity in Home?

[Stephen Kunen]

Hi All,

I recently read about an insurance product called Home Equity Insurance that from what I can tell is supposed to provide a payout to the homeowner at the time of sale if the corresponding Home Price Index has gone down in value.  It seems this product is relatively new (starting from 1999-2000) and seems designed to help protect homeowners largest investment (personal residence) against another large financial crash like in 2008.  

It seems this insurance is also available for rental properties and vacation homes too. I found one provider of this product, http://equitylocksolutions.com/ and it seems there is a deductible and a premium to pay, and while you can even receive a payout when selling the home at a profit if the index goes down, you won't get anything if you sell your house (even at a loss) when the index is flat or goes up. 

Does anyone have any experience with this product or thoughts on what, if anything it might actually be good for? Perhaps this might be a good idea for rehabbers/flippers, but not as good for buy and hold cash flow investors. Maybe for a personal residence it makes more sense if you see yourself living in the home only for a few years. Thoughts?

Steve