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Homeowners insurance and mortgage insurance: who is protected? | Mortgage 101
Sources and calculations checked:
Compare what homeowners insurance covers with whom mortgage insurance protects.
Homeowners insurance
Covers property and other insured risksCoverage for property, belongings, or liability depends on the policy.
Mortgage insurance
Primarily protects the lenderProtects the lender against borrower default; it does not remove your repayment responsibility.
They cover different risks and cannot replace each other.
Diagram does not show actual amounts, proportions, or a complete list of costs.
One thing to remember
Homeowners insurance and mortgage insurance cover different risks.
Homeowners coverage depends on the policy. Mortgage insurance primarily protects the lender; it neither replaces homeowners insurance nor removes your repayment responsibility. Requirements and costs depend on the loan program.
CFPB: Explanation and conditions