Ohio’s Home Value Insurance Co. Now in Rehabilitation

Home Value Insurance Co. was ordered into rehabilitation by an Ohio court on Aug. 31, and has been prohibited from selling insurance in the state due to its failure to maintain minimum capital and surplus. HVIC is headquartered in Columbus, Ohio.

The insurer, which originally launched in 2009 but pulled back and then reentered the insurance market in 2011, covers the loss in value if a homeowner sells a home for less than its appraised value at the time it was insured. The policy guarantees the present home value for up to 10 years and compensates policyholders in case of a market decline of up to 25 percent.

HVIC’s website (homevalueprotection.com) now redirects to the Ohio Insurance Liquidator site, which states the company was ordered into rehabilitation by the Court of Common Pleas of Franklin County, Ohio.

The rehabilitation order says that HVIC failed to maintain the $5 million minimum capital and surplus required by Ohio statutes and is in a “hazardous” financial condition.

The rehabilitation was sought by Ohio Superintendent of Insurance Mary Taylor on Aug. 29. Taylor was appointed as the receiver for HVIC.

Information on the Ohio Insurance Liquidator’s site states that HVIC has 172 polices as of the date of the rehabilitation order and sold policies between September 2011 and June 2012 in Ohio, as well as in Oklahoma and Georgia. HVIC was also licensed to sell insurance in Arizona, Indiana, Louisiana, Oregon and Texas but did not issue any policies in these states.

At press time, the company was still listed as an active insurer in two states where HVIC has written policies — Oklahoma and Georgia.

The Indiana Department of Insurance, however, told Insurance Journal that HVIC’s license has been deactivated in that state.

When contacted, the Ohio Department of Insurance would not comment on the rehabilitation order except to say that “the company fell below Ohio’s minimum capital and surplus standards, which are in place to protect Ohio insurance consumers.” It directed further inquiries to a “Frequently Asked Questions and Answers Related To Home Value Insurance Company (HVIC) In Rehabilitation” document on the Ohio Insurance Liquidator’s website.

The FAQ document, dated Aug. 31, says that the HVIC’s board of directors agreed that rehabilitation is appropriate.

The company did not return requests from Insurance Journal for comment.

HVIC appears to have more cash than current claims, despite being below the minimum $5 million capital and surplus. However, the FAQ states, “At this point in time, the Rehabilitator does not expect that the Rehabilitation Plan will retain HVIC as a going concern.”

Any claims will be processed by the rehabilitator and should be directed to the Ohio Insurance Liquidator. In addition, policies are not being cancelled by the order and it is not anticipated at this time that any policies will be cancelled prior to any rehabilitation plan being put in place.

The FAQ says policyholders should continue to pay their policy premiums and those who do not pay will have their HVIC policy cancelled according to the terms.

Agents may not continue to sell HVIC policies and any outstanding commissions are a liability of HVIC.