Both homeowner's insurance and mortgage insurance can add to the cost of owning a property, and you may encounter both during the mortgage process. However, their similarity ends there. The basic difference is this: Homeowner's insurance protects your home and its contents, while mortgage insurance (also known as private mortgage insurance or PMI for short) protects your mortgage lender in case you can't meet your mortgage payments. Homeowners Insurance vs. Mortgage Insurance Although homeowner's insurance and mortgage insurance sound similar, they are actually very different. Here is a brief description of each. What is Homeowners Insurance? Homeowners insurance is a form of property insurance designed to protect your home and its contents from damage caused by unforeseen events. Additionally, most homeowner's insurance protects you from lawsuits if someone is injured on your property. It insures your home and property against expenses related to damag