Mortgage and home equity insurances for home owners and rental insurancefor tenants

Households face many different kinds of risks that are related to ownership and tenancy. Forinstance, home owners face both financial and capital risk, whereas tenants face risks relatedto rent level. The present paper focuses on mortgage and home equity insurance instruments for home owners, and rent insurance instruments for tenants. Mortgage and home equityinsurances might improve both households’ as well as lenders possibilities to manage risksrelated to home purchases, financial commitments and lending. Mortgage insuranceinstruments aims at mitigating the risk of mortgage default and loan losses resulting from a foreclosure process, while home equity insurance provide protection against capital losses.Furthermore, these insurance instruments might also be usable for expanding home ownershipfor low-income households. This paper also discusses a rental insurance policy as analternative to traditional rent regulation. A main feature of this policy is that landlords are supposed to be obliged to offer tenants rental insurance against strong increases in marketrentsQC 2010081