Some things never change. It is sad to think that so many consumers lost literally everything they owned in the market crash of 2008 that set off a tidal wave around the globe.
Many workers almost at retirement age, as well as current retirees, lost their entire pensions. Major banks and financial institutions crashed while others were brought to the very brink.
All the elements leading up to that event are occurring today, but have we learned anything? Experts warn of regional housing markets heading for a crash and that was the very first domino to start the cascade in what would become a historic market crash in 2008.
If major lenders fail today, and if homeowners then default on their mortgages, they could very well lose the biggest investment they’ve made in a lifetime.
Armed with this information, what can homeowners do to protect their investment, and indeed, the roof over their heads?
Invest in Two Essential Types of Insurance Coverage
During the Great Recession mentioned above, many people lost their jobs as a result of the market crash leading up to that event.
With no income, many then had their mortgage loans foreclosed and others who were able to hold on by the skin of their teeth regretted not getting the kind of insurance that would pay to fix or replace major appliances or structural damage that occurred during that downturn in the economy.
The two types of coverage you should be looking into now would be mortgage unemployment insurance and home warranty insurance.
Mortgage unemployment insurance kicks in after a specified time to make payments directly to your mortgage lender if you are out of work due to being laid off or terminated if your company folds.
Why Home Warranty Insurance?
Home warranty insurance is something altogether different. Those people who were able to make mortgage payments but suffered loss or damage to their homes lamented not being able to cover the cost of repairs.
Every penny they had went into sustenance with nothing left over to repair that hole gouged in the roof by a windblown tree or the hot water heater that suddenly failed sending floods of water throughout that area of the home.
There are various companies that sell home warranty insurance and the best way to find the company that offers a plan that is right for you would be to look online at a comparison or review site like top10.com. One of the leading companies that keeps coming up is the Select home warranty insurance policy.
If you check out that review, you will be able to compare their coverage to other companies while taking a look at what the reviewer saw as the pros and cons.
This can be a separate standalone policy, or you may be able to add this type of coverage to your existing homeowner’s policy.
Does Mortgage Unemployment Insurance Really Need an Explanation?
Unfortunately, while you might wonder why someone would even want to know why they should buy mortgage unemployment insurance, the facts should speak for themselves.
There is already a housing crisis around the country with many people unable to afford a new home due to rising cost of real estate. If there is a crash and if a significant number of companies are brought to the point of bankruptcy, a huge portion of the population will lose their jobs.
Should that be the case, there will be few jobs to move into and that could very well leave a homeowner unemployed for the duration of the recession, should one occur.
A majority of financial experts are expressing a growing concern that we are, indeed, heading for a housing crash. It then follows that the economy will follow a similar path to the crash of 2008 that rippled through all industries, not just housing.
As one of the two types of insurance coverage that could very well protect your investment in the home you love, it makes sense to be prepared.
To Borrow an Old Advertising Slogan
This is perhaps one of the oldest advertising slogans that was often heard on radio and television in the later 20th century. Whenever there was a large markdown on high ticket items the ads would say, “spend a little, save a lot”.
Isn’t that what we are saying here? The cost of insurance is minimal compared to the amount of risk in losing your house or being forced to deal with major repairs with no income to make them.
Besides adding the necessary insurance coverage to protect your home, it is suggested that you pay careful attention to the news as it unfolds.
Learn where you can safely put your money so that it is protected in the events that banks fold as they did leading up to the Great Recession.
Can you safely bank it? Is the FDIC going to cover the amount you have saved in a financial institution with that insurance?
In times like these, a little knowledge goes a long way. Stay current on financial news and do what you can to protect your home if these predictions come to pass.