What type of insurance is usually required when securing a mortgage?

When securing a mortgage, homeowners insurance is typically required by lenders. This type of insurance provides financial protection against damage to the property from perils such as fire, theft, and certain natural disasters. It also typically includes liability coverage that protects homeowners in the event that someone is injured on their property.

Lenders require homeowners insurance to ensure that their investment is protected. If the property were to suffer significant damage, homeowners insurance would help cover repair costs, thereby safeguarding the lender's financial interest in the property. Without this insurance, a borrower may be at risk of losing their home and the lender's collateral would also be at risk.

Other types of insurance listed, such as auto insurance and renters insurance, serve different purposes and are not relevant when it comes to mortgage requirements. Life insurance, while potentially beneficial for providing for loved ones in the event of the policyholder's death, does not directly protect the property, making it unnecessary in the context of acquiring a mortgage. Thus, homeowners insurance stands out as the required insurance for mortgage obtainment.