Homeowners insurance
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Definition
Homeowners insurance is a policy that helps cover certain damage to a home and, in many policies, related liability. Mortgage lenders commonly require it while the loan is outstanding.
In plain English
A mortgage is secured by the house. Lenders typically require insurance so a covered loss does not leave the collateral unprotected. The policy is between the owner and the insurer; the lender may be named as a mortgagee. Premiums are often paid through an escrow account along with property taxes. Hazard insurance is a closely related label some sources use; this page uses the consumer homeowners-insurance name.
Technical definition
Consumer glossaries describe homeowners insurance as coverage for the home that a lender may require. It is not mortgage insurance, which protects the lender against credit loss.
Why it matters
Escrow analyses and monthly-payment totals often include this premium. Treating it as mortgage insurance misstates who is protected.
Related terms
Commonly confused with
Sources reviewed
Glossary of key terms
Source reviewedSeptember 4, 2026
Mortgage key terms
Source reviewedSeptember 4, 2026
Important note
Homeowners insurance is not mortgage insurance or PMI.
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