Home Price Protection vs. PMI vs. Homeowner’s Insurance: What Each Actually Covers

What is PMI on a mortgage? And how does it compare to homeowners insurance and Home Price Protection? Three protections, three different risks, three different people being protected. The names sound similar. What they cover isn’t.

The Quick Comparison

What Is PMI on a Mortgage?

Private mortgage insurance exists because lenders view loans with less than 20% equity as higher risk. If you default and the lender forecloses, they may not recover the full balance — especially in a declining market. PMI covers that gap. For the lender.

You pay it monthly (0.5-1.5% of the loan annually) until you reach 20-22% equity based on the home’s original value. You can request cancellation at 80% LTV (20% equity). PMI automatically terminates at 78% LTV (22% equity) on the original amortization schedule — no request needed. On a $400,000 home with 5% down, PMI runs $158-$475/month. It does not protect your equity. It does not pay you if the market drops. It protects the bank.

Homeowner’s Insurance: What It Covers

Homeowner’s insurance covers physical damage — fire, wind, theft, liability, and other named perils depending on the policy. Flood is separate. Earthquake is separate in most states.

This is the one most people understand: something damages your house, you file a claim, the insurance company pays to repair or replace it minus your deductible. Lenders require it because the home is their collateral.

What homeowner’s insurance does not cover: the market value of your home declining. If your $450,000 home is worth $400,000 a year later because the local market softened, your insurance company has nothing to say about it. The house isn’t damaged. The market moved.

Home Price Protection: The Category Nobody Else Offers

Home Price Protection covers the risk neither PMI nor homeowner’s insurance touches: your local housing market declining.

It’s a contract — built on REZITRADE‘s platform — tied to an independent, third-party market index for your area. If that index falls below a defined threshold (the Trigger) by the end of your contract term (the Expiration Date), you receive a cash payout via direct deposit within 30 days.

No claims to file. No damage to prove. No adjuster. No deductible. The payout is determined by objective index data.

And you don’t pay for it. As a benefit of working with the REZILOANS Team, your first year of protection is provided at zero cost — no premiums, no fees. No other mortgage provider does this. For a full walkthrough of the mechanics, see Home Price Protection 101.

When Each One Matters

PMI matters when you’re putting less than 20% down on a conventional loan. It’s a cost of entry, not a benefit. You can request cancellation at 80% LTV (original value), and it auto-terminates at 78%.

Homeowner’s insurance matters always. Shop it annually — premiums have jumped 30-40% in many states, and coverage gaps (flood exclusions, wind exclusions) can be financially devastating.

Home Price Protection matters because corrections don’t announce themselves — 23 of the 33 largest U.S. metros have seen price declines since 2022. It’s the only one of the three that costs you nothing and protects your equity rather than the lender’s position.

Frequently Asked Questions

Do I need all three?

PMI is required if you put less than 20% down on a conventional loan (VA and FHA have different insurance structures). Homeowner’s insurance is always required. Home Price Protection is provided automatically by the REZILOANS Team at zero cost for your first year.

Can Home Price Protection replace PMI?

No. They cover different risks. PMI covers the lender against default. HPP covers you against market decline. They’re not substitutes.

What if my home is damaged AND the market drops?

Insurance covers the physical damage. Home Price Protection covers the market decline. They’re independent. You could receive benefits from both.

Does Home Price Protection cost me anything?

Nothing for your first year — it’s a benefit of working with the REZILOANS Team. For more on why, see What Is Home Price Protection?

Where can I learn about payout timing?

See Home Price Protection Payouts: What to Expect and When.

Conclusion

PMI protects the lender. Insurance covers physical damage. Home Price Protection covers market decline — and you pay nothing for it. Of the three, it’s the only one built specifically to protect your home’s value. The REZILOANS Team provides it as a benefit of working with them. No other mortgage provider does. Get Started.