Buying a home isn’t just signing papers — it’s stepping into one of life’s biggest milestones. You’re investing in stability, comfort, and the memories that will fill every corner of that space. But with that excitement comes a question that almost every homeowner asks at some point:
What insurance do you need for a home?
The short answer: more than most people think. Between homeowners insurance, Private Mortgage Insurance (PMI), and mortgage protection insurance, each plays a unique role. Some protect your lender, others your property — but only one truly protects you and your family.
A few years ago, I learned the hard way just how quickly life can change. At 31, I thought I had time to “get around” to setting up the right protections. But an unexpected medical issue left me unable to walk for months. That experience opened my eyes to how fragile stability can be — and how important it is to plan ahead.
This guide breaks down the different types of insurance tied to homeownership, what they cover, and which ones actually safeguard your future.
When most people think about what insurance do you need for a home, home insurance is the one that comes to mind. Homeowners insurance protects your home’s structure and contents against unexpected damage or loss — things like fire, theft, storm damage, or vandalism. According to the Insurance Information Institute, in 2023, 97.3% of homeowners insurance claims were due to property damage and theft.
If your home is damaged, this policy helps pay for repairs or replacement. It can also cover:
Personal belongings (furniture, electronics, clothing, etc.)
Additional living expenses if you need to live elsewhere during repairs
Liability protection in case someone gets injured on your property
Mortgage lenders typically require homeowners insurance as a condition for closing on your loan. But even if your mortgage is paid off, keeping it is smart — it protects your financial investment.
Example:
A burst pipe floods your living room and ruins your flooring. Homeowners insurance steps in to cover the repairs. Without it, you’d be paying out of pocket.
While essential, it’s important to note: homeowners insurance protects your property, not your ability to pay for it. That’s where the next two types come in.
So that's one that answers What Insurance Do You Need for a Home? now for...
Private Mortgage Insurance (PMI) isn’t about you — it’s about your lender. If you buy a home with less than 20% down, most banks require PMI as extra protection in case you default on the loan and according to USMI, PMI helped 800,000 borrowers in the U.S. become homeowners.
PMI does not protect your home or your family. Instead, it ensures the lender gets reimbursed if you stop making payments and the home has to be foreclosed.
It’s often added to your monthly mortgage payment and can cost between 0.5% to 1.5% of your loan amount annually, depending on credit and down payment size.
You can usually cancel PMI once you reach 20% equity in your home, either through payments or rising property value.
In short:
PMI = required by lender if less than 20% down
Protects the lender
Temporary until you reach 20% equity
Useful? Yes.
Protective? Not for you.
Now we get to the one that the banks don't want you to know about — the most important form of home-related coverage: mortgage protection insurance.
This one doesn’t protect the bank. It protects your loved ones — and in some cases, you directly.
Mortgage protection is a personally owned life insurance policy (usually Term Life or Indexed Universal Life) designed around your mortgage. It pays your family — not the lender — if you pass away, so they can keep the home or use the money however they need.
And unlike most traditional life insurance, it can also pay out while you’re still alive.
That’s where living benefits come in. Many modern mortgage protection policies let you access up to 80% of your coverage if you suffer a serious illness or injury. This could mean help paying the mortgage, covering medical expenses, or simply having breathing room while you recover.
Key benefits include:
Pays your family directly — not the bank
Living benefits for illness or injury
Level coverage that doesn’t decrease as you pay down the mortgage
Return of premium options (get your money back if you outlive the term)
Cash value growth with certain IUL policies
When I went through my own health battle, I realized how powerful that kind of protection is. I didn’t have it then, and I had to lean heavily on family. If I had a living-benefits policy, I could’ve maintained independence and kept up financially through recovery.
Mortgage protection gives homeowners what other insurance types don’t: control and dignity when life doesn’t go as planned.
Insurance Type | Protects | Who Gets Paid | When It Pays Out | Required? |
|---|---|---|---|---|
Homeowners Insurance | Property (house, belongings) | You | Damage, fire, theft, etc. | Yes (for mortgages) |
Private Mortgage Insurance (PMI) | The lender | The lender | If you default | Often (if <20% down) |
Mortgage Protection Insurance | You & your family | Your beneficiary | Death, illness, or injury | Optional but highly recommended |
Together, these three types of insurance form a complete safety net — but only mortgage protection directly safeguards you as a homeowner.
Homeowners insurance keeps your house intact.
PMI keeps your lender secure.
Mortgage protection keeps your family protected and your home truly safe.
Most homeowners never hear about mortgage protection until they get a postcard or call years later. That’s unfortunate because it’s the only plan that ensures your home stays in your family’s hands if life throws you a curveball.
It’s affordable, customizable, and can be structured for almost any situation — new homeowners, families, or even retirees who just refinanced.
If you’re young and healthy, you can lock in coverage for decades at rates that won’t change. If you’re older or have health conditions, there are options that will still most likely help get you covered.
Simply put: mortgage protection gives you the one thing money can’t buy — peace of mind.
When I talk about mortgage protection, it’s not theoretical. It’s personal. I know what it feels like to have everything change overnight — to worry about stability, independence, and not wanting to be a burden.
That’s why I believe in coverage that doesn’t just protect a house — it protects the life inside it.
Your home isn’t just wood and walls. It’s the late-night conversations, family dinners, and the comfort of knowing you have a safe place to come back to. Mortgage protection ensures those moments continue — even if you’re not there to make the payments.
So, what insurance do you need for a home?
At minimum, you’ll need homeowners insurance to protect the property and PMI if your down payment is small. But if you want to protect the people living inside the home — and ensure your family can stay there no matter what — mortgage protection is essential.
Because when life changes unexpectedly, your family shouldn’t have to lose their home while trying to hold everything else together.
Take time to explore your options and speak with a licensed broker who can compare multiple carriers for you for mortgage protection (hint: that's what we do. Click here). You’ll gain more than a policy — you’ll gain peace of mind knowing your home, your investment, and your loved ones are protected.
Can a life insurance beneficiary be a minor? Yes — but children can’t legally receive the payout directly. This guide explains what really happens, how to avoid court delays, and the safest ways to leave life insurance to a child using a custodian, trust, or designated adult. Perfect for parents, guardians, and godparents planning ahead.
Permanent Life Insurance offers more than coverage — it’s a lifelong plan for stability and peace of mind. With guaranteed protection, level premiums, and tax-deferred cash value, it helps you safeguard your family and build financial strength that lasts a lifetime.
Difference between term and whole life insurance. Choosing between term and whole life insurance can shape your family’s financial future. This guide breaks down the differences, pros and cons, and proven strategies for both.
What is whole life insurance? Whole life insurance offers more than just lifelong coverage—it builds cash value, creates wealth opportunities, and provides lasting protection. This guide explains what a whole life policy is, how it works, and strategies for making the most of it.
Final expense insurance—also called burial or funeral insurance—provides affordable, permanent coverage for end-of-life costs. This guide explains how it works, what it covers, and why it can ease the financial burden on your loved ones.
What is an IUL? Indexed Universal Life (IUL) insurance combines lifelong protection with market-linked cash value growth. This guide explains how an IUL works, its pros and cons, and strategies for using it as part of a financial plan.
What is term life insurance? Term life insurance is simple, affordable coverage that protects your family for 10–30 years. This guide explains how it works, its pros and cons, and strategies for using it.
What are living benefits? Living benefits turn life insurance into more than just a death benefit. They let you access funds while alive if you face illness or long-term care needs. This guide explains what living benefits are, how they work, and secrets on how to make them work for you.
Life Insurance 101 covers everything you need to know about protecting your family. Learn the basics of term, whole, IUL, final expense, mortgage protection, and living benefits—all explained simply with strategies for choosing the right policy.
Is Life Insurance Taxable? Most life insurance payouts are tax-free, but there are exceptions. This guide explains when life insurance is taxable, when it isn’t, and strategies to protect your family from unnecessary taxes.
Can a life insurance beneficiary be a minor? Yes — but children can’t legally receive the payout directly. This guide explains what really happens, how to avoid court delays, and the safest ways to leave life insurance to a child using a custodian, trust, or designated adult. Perfect for parents, guardians, and godparents planning ahead.
Permanent Life Insurance offers more than coverage — it’s a lifelong plan for stability and peace of mind. With guaranteed protection, level premiums, and tax-deferred cash value, it helps you safeguard your family and build financial strength that lasts a lifetime.
Difference between term and whole life insurance. Choosing between term and whole life insurance can shape your family’s financial future. This guide breaks down the differences, pros and cons, and proven strategies for both.
