when you apply for a mortgage you re usually required to provide proof of insurance on the property before the banks will loan you funds the property insurance can be acquired separately or by the lending bank 
if you want to get your own insurance policy you can compare multiple offers and pick the plan that works best for your needs if you don t have your property covered from loss or damages the bank may get one for you at an extra cost payments made toward a homeowners insurance policy are usually included in the monthly payments of your mortgage the lending bank that receives the payment allocates the portion for insurance coverage to an escrow account once the insurance bill comes due the amount owed is settled from this escrow account homeowners insurance vs home warrantyhomeowners insurance is different from a home warranty a home warranty is a contract that provides for repairs or replacements of home systems and appliances such as ovens water heaters washers dryers and pools these contracts usually expire after a certain period usually 12 months and are not mandatory for a homeowner to buy to qualify for a mortgage a home warranty covers issues and problems that result from poor maintenance or inevitable wear and tear on items situations in which homeowners insurance doesn t apply homeowners insurance vs mortgage insurancea homeowners insurance policy also differs from mortgage insurance mortgage insurance is typically required by the bank or mortgage company for homebuyers making a down payment of less than 20 of the cost of the property the federal home administration also requires it of those taking out an fha loan 4 it s an extra fee that can be figured into the regular mortgage payments or may be a lump sum charged when the mortgage is issued some homeowner policies include a mortgagee clause the clause covers and pays the lender in case your home is lost or irreparably damaged during the time you have a mortgage on it mortgage insurance covers the lender for taking on the extra risk of a home buyer who doesn t meet the usual mortgage requirements if the buyer should default on payments the mortgage insurance would compensate the lender basically while both deal with residences homeowners insurance protects the homeowner while mortgage insurance protects the mortgage lender 