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Home Insurance vs. Mortgage Insurance: What’s the Difference?

When purchasing a home, there are many different types of insurance packages that you will need to consider purchasing, including home insurance and mortgage insurance. At Mountainview Insurance, we want to help ensure that you and your home are covered by the best insurance packages available. Here are some of the differences between home insurance and mortgage insurance, and how they can benefit you.

What is Home Insurance?

Home insurance or homeowner’s insurance helps protect the owner in the event that the house or the contents of the house are damaged; however, there are many different types of home insurance packages that are specifically designed to cover different types of damage. While most homeowner’s insurance packages can be customized to the individual needs of the home being covered, it is important to ensure that you know what your specific package does and does not cover.

Why Do You Need Homeowner’s Insurance?

Houses tend to be a person’s most expensive asset, which means that it is extremely important to ensure that that asset is properly protected. Home insurance is a great way to ensure that your home and belongings are properly protected. Some of the things that home insurance covers, includes:

  • The house’s structure
  • Personal belongings
  • Liability for family members and pets
  • Additional living expenses when the house is too damaged to live in

What is Mortgage Insurance?

While mortgage insurance is often confused with home insurance, it is a completely different type of insurance package that most homeowners have to purchase. Mortgage insurance is designed to help protect mortgage lenders from losing money in the event that a homeowner is unable to pay off their mortgage due to death or serious illness. One of the main benefits of mortgage insurance is that it allows homeowners to buy a house with a down payment as little as 5%, which can be a great advantage to first time home buyers.

Why Do You Need Mortgage Insurance?

In Canada, every homeowner that purchases a mortgage without at least a 25% down payment must purchase mortgage insurance. If you are considering getting a loan from a non-government source, you may be required to purchase private mortgage insurance (PMI). In the case of certain lenders, it may be necessary to negotiate a mortgage insurance package based on your credit score and history.

If you would like to more about the differences between home insurance and mortgage insurance, or if you are interested in one of our insurance products, please contact Moutainview Insurance at 604-557-0255 or by requesting a quote on our website.

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