Home equity insurance

被引:56
作者
Shiller, RJ [1 ]
Weiss, AN
机构
[1] Yale Univ, Cowles Fdn, New Haven, CT 06520 USA
[2] Case Schiller Weiss Inc, Cambridge, MA 02138 USA
关键词
real estate risk; insurance; hedging; mortgages;
D O I
10.1023/A:1007779229387
中图分类号
F8 [财政、金融];
学科分类号
0202 ;
摘要
Home equity insurance policies-policies insuring homeowners against declines in the prices of their homes-would bear some resemblance both to ordinary insurance and to financial hedging vehicles. A menu of choices for the design of such policies is presented here, and conceptual issues are discussed. Choices include pass-through futures and options, in which the insurance company in effect serves as a retailer to homeowners of short positions in real estate futures markets or of put options on real estate indices. Another choice is a life-event-triggered insurance policy, in which the homeowner pays regular fixed insurance premia and is entitled to a claim if both a sufficient decline in the real estate price index and a specified life event (such as a move beyond a certain geographical distance) occur. Pricing of the premia to cover loss experience is derived, and tables of break-even policy premia are shown, based on estimated models of Los Angeles housing prices from 1971 to 1994.
引用
收藏
页码:21 / 47
页数:27
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