Required coverage
Lenders require hazard insurance for at least the lesser of replacement cost or the loan amount, naming the lender as mortgagee. Proof is needed before closing.
Deductibles
Lenders may limit deductibles. Wind or hurricane deductibles may be a percentage of coverage in some areas.
What lenders require for hazard insurance, how premiums affect your payment, and how to shop coverage.
Flood
Standard policies exclude flood. Federally backed loans on homes in special flood hazard areas require flood insurance.
Shopping
Get quotes from several carriers early. Premiums can vary by roof age, construction, claims history and credit-based insurance scores where allowed.
Force-placed insurance
If coverage lapses, the servicer can buy force-placed insurance at your expense, often at a high cost. Keep coverage current.
Condos
Condo owners usually need an HO-6 policy for interior coverage, in addition to the association's master policy.
Insurance and qualifying
Lenders include the insurance premium in your housing payment when calculating debt-to-income ratios. In areas where premiums have risen quickly, a realistic quote early in the process can prevent a surprise late in underwriting. If a carrier declines to write a policy because of the roof or past claims, find out quickly, because it may affect whether the purchase can close on time. Your agent may know local carriers that write policies on older homes.
Sources
Sources checked 10/23/2026. General education only; confirm current rules with official sources and a licensed lender.