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What is the difference between private mortgage insurance and homeowners insurance?

Asked by Trulia Brooklyn, Brooklyn, NY Thu Feb 7, 2013

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Javier Meneses’ answer
BEST ANSWER
It's a simple as the way Josh described it below. Homeowner's insurance, is your hazard insurance. The lender requires that you carry a hazard insurance policy to cover yourself and the lender from most physical damages to your property. You elect the company from whom you'd like to purchase hazard insurance from.

Private mortgage insurance is a totally separate policy that your lender obtains to protect a percentage of the loan amount, again protecting the lender.

Javier Meneses
NMLS #23130
Senior Loan Officer
Sterling National Bank
jmeneses@snb.com
(516) 606-9648
4 votes Thank Flag Link Thu Feb 7, 2013
That pretty much sums up what a mortgage lender is I guess. I was trying to figure out what the mortgage lender does because I was told to talk to my mortgage lender about some questions I had. I really hope that they can answer the questions I have.

Zach| http://www.paramountmortgagelender.com
Flag Tue Oct 14, 2014
Private Mortgage Insurance (PMI) protects lender against loan default, Homeowners insurance protects homeowner and lender against property loss and liability issues.
5 votes Thank Flag Link Mon Mar 11, 2013
This is great, thank you. I have been wondering what the difference is because I just bought a house and haven't been able to decide what I should get. I now know that I need to get homeowners insurance because I just want to protect the house itself. I just bought this house and I want to protect it as best as I can. Hopefully I will never have to use the insurance, but it will be good to have.

http://www.maynardinsurance.ca/en/home_insurance.html
Flag Tue Mar 17, 2015
Homeowners insurance protects the homeowner and PMI protects the homeowner's lender.
1 vote Thank Flag Link Sun Feb 10, 2013
That seems like a pretty simple explanation. My wife and I are getting ready to purchase our first home, so we're still pretty new with this whole process. We want to make sure that we get the coverage that's necessary in the cheapest way possible. A home is a really big purchase, and I want to make sure that we have the best insurance that we can on it. http://www.arkansasfirstchoiceinsurance.com/services
Flag Tue Jan 20, 2015
I think in some cases you will need both, though. I think it depends on your situation, so I would just ask a professional for their advice. That way you can know what's the best option for your housing situation. Sometimes homeowners insurance will suffice just by itself. http://www.lofgrenagency.com
Flag Tue Nov 4, 2014
PMI protects the lender from the owner defaulting.

Homeowners protects the owner and the lender on the back side from acts of God, theft, etc, depending on the policy.

Hope this helps.
1 vote Thank Flag Link Thu Feb 7, 2013
Thanks for clarifying this! I've been trying to navigate homeowners insurance for a while. I'm a strong believer that you should do your best to be an expert in your own finances and insurance, but it can really get complicated when you aren't sure what you're doing.

Sal Wesson | http://www.coastcompins.com/coastcomp-homeowners-insurance.nxg
Flag Fri May 30, 2014
Nice quick answer!
Flag Thu Feb 7, 2013
I would assume that they either cover different things or they are processed in different ways. I think the best way to find out what the difference is is to talk to an insurance agent. Whatever the difference is, it's important to do what you can to make sure that your home is covered from potential damages. That should be your main focus and concern.
http://floridahomeinsuranceagency.com/home/port-st-lucie/
0 votes Thank Flag Link Thu Apr 23, 2015
Private Mortgage Insurance is insurance that covers your loan amount should you go into default, where as Homeowner's insurance covers your home should you have a fire in the home.
0 votes Thank Flag Link Mon Mar 16, 2015
The difference is in what is being insured. Mortgage insurance will cover the investment that is made and the money you are putting into it. Homeowners insurance will actually cover your house. Both are good to have. It's pretty essential to have homeowners insurance though. If nothing else, having that insurance makes it so that you know that things will be covered when unexpected things inevitably happen.
http://integrityinsuranceinternational.com/home-insurance.aspx
0 votes Thank Flag Link Fri Nov 7, 2014
Thanks a lot for this information. My husband I are getting ready to purchase our first home, and we're not sure what kind of insurance we should get. It seems like both types of insurance are going to be important to get. It would be horrible to have an accident and be without insurance. http://www.macdowellins.com
Flag Tue Mar 10, 2015
Mortgage insurance is very different from homeowner's insurance. As a home owner you need to only worry about homeowner's insurance and your bank will worry about mortgage insurance. One is to protect your home from damage and the other is to protect the lender against losses from the mortgage. http://www.advantageinsagents.com/homeowner-insurance
Flag Wed Nov 12, 2014
In it's simplest form....

Private Mortgage Insurance (PMI / MIP) = Protects the lender.

Homeowners Insurance = Protects you / your home.


If you have any specific questions regarding the two please don't hesitate contacting me directly via phone or email.


Kind regards,

Paul Marzolla
Vice President
Direct: (201) 957-6768
Email: info@paulmarzolla.com
http://www.PaulMarzolla.com
__________________________________________________

NMLS#922891
Licensed by New York Department of Financial Services
Member of NAMB - The Association of Mortgage Professionals
Member of New York Real Estate Investors Association
__________________________________________________
0 votes Thank Flag Link Wed Oct 1, 2014
In addition to what my colleauges mentioned, PMI protects the lender to an extent and homeowner's insurance protects the buyers to an extent.
0 votes Thank Flag Link Tue Sep 30, 2014
Homeowners insurance protects you from hazards. For example, my neighbors were out in their pasture burning weeds. The fire got out of control and started to burn towards the house. It eventually made its way to my neighbor's home and caught the house on fire. They had it insured so a lot of the repairs were covered. Insurance can be a real life saver when you have it. http://hma4ins.com/personal-home/
0 votes Thank Flag Link Tue Sep 30, 2014
Thank you for asking this question! My husband and I are looking into buying our first house soon, and we want to make sure we are doing it correctly. We were wondering what the difference was, and now we know! Is it valuable to have both types of insurance?

Jenny Noble | http://www.olynorthwest.com
0 votes Thank Flag Link Wed Jul 16, 2014
PMI is the insurance on top of the actual mortgage. Homeowners insurance is what protects your actual home and the coverage of the home if anything happens to it.
Web Reference: http://www.acinsurance.ca
0 votes Thank Flag Link Tue Oct 29, 2013
PMI (private mortgage insurance) is an insurance that insures the mortgage, not the home.. Homeowners insurance, insures the home (brick and mortar) and your personal items.

Have a great day;

Christina Solorzano;
CEO & SR Credit & Mortgage Consultant of
Everlasting Credit Repair
Making home ownership more than a dream...
Retired Mortgage Banker
http://www.everlastingcredit.com
0 votes Thank Flag Link Tue May 28, 2013
The difference is. When purchasing a home, and the loan from a bank is acquired, it necessary to purchase private mortgage insurance (a.k.a.) also know as (PMI), This covers the loan amount , in thee event of default of the loan. PMI can also be eliminated once the equity of the property has increased to 20%
On the other hand, home owners insurance is also required by bank to cover the property in regards to the property itself. Home owner insurance is also optional once the loan is paid off.
Regards,
Diana Melerud
Superior Realty Broker
2008 Ave Y
Brooklyn, NY 11235
Office: 1(347)554-8282
Fax: 1(347)554-8283
Cell: 1(917)992-7239
Email: diana.melerud@gmail.com
See My Listings: http://diana.postlets.com
Superior Realty: http://www.superiorrealtyny.com/index.htm
0 votes Thank Flag Link Sat May 18, 2013
Personal mortgage insurance (a.k.a.) also known as (PMI), is to cover the banks vested interest in loan amount to the borrower of the property in the event of default of the loan, especially early in the loan. Home owner insurance is mandated by the bank, for as long as the loan is in place, and optional if the loan is paid off.
Where as PMI can be eliminated once the property equity has increased by 20 to 25 % in most cases. Thanks Diana Superior Realty Service 917 992 7239.
0 votes Thank Flag Link Sat May 18, 2013
Hi,

Homeowners insurance protects you from financial loss caused by an event covered by the policy. Private mortgage insurance protects the lender from financial loss for the portion of your loan that is above 80% loan to value ratio of the original loan amount should you default on your loan payments.

Michael Richman
Licensed Real Estate Associate Broker
KIAN Realty
450 7th Avenue Suite 1501
New York, NY 10123
212-757-8268 x220
917-991-2528
mrichman@kianrealtynyc.com
http://www.kianrealtynyc.com
0 votes Thank Flag Link Sun Feb 10, 2013
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