What Is Mortgage Insurance Vs Homeowners Insurance? 
Mortgage insurance , also known as private mortgage insurance , or PMI , is insurance that the bank requires and you pay for . This coverage pays off the bank 's loss if they 're required to foreclose . Homeowners insurance protects the home itself , as well as offers you liability coverage . There is no overlapping coverage between the two . The less you put down , the more likely you are to need PMI , but EVERYONE needs homeowners insurance . 