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New property value insurance in Ohio

The value of homes can be protected through a new insurance program debuting in Ohio.

The value of homes can be protected through a new insurance program debuting in Ohio.

The state of Ohio is debuting a new insurance program called Home Value Insurance designed to protect homeowners from losing value on their homes when the housing market declines. The state says it is the first insurance program of its kind in the country.

NBC 4 Columbus reported that through the Home Value Insurance program, homeowners would pay between $35 and $45 a month to protect their property value. In the first two years of the program, however, the policy does not give full value. This is in an effort to prevent people from buying homes and flipping them, thus exploiting the insurance.

After two years, what the policy pays out is based off the value of the home in the Case-Shiller Index and local market values. The insurance does have a maximum payout for a loss, which is 25 percent of the home value, the news source reported.

Scott Ryles, CEO of Home Value Insurance Company, told the news source the protection gives homeowners more control over their financial future.

"They have the flexibility to sell when they want to, without being hurt by poor real estate market conditions," Ryles said.

However many experts believe this type of insurance has less value to homeowners in the current housing market than it could have provided in the years leading up to the housing crisis. Marketwatch reported that while many homeowners saw their homes drop in value during the mortgage crisis, many still believe the market will drop further and will participate in the new insurance program to avoid further declines in home equity.