Hazard Insurance Requirement 

Let’s assume you close on your loan on the first of January and it is destroyed in a winter storm later that month. You now owe a bundle of money on a home that no longer exists! The lender does not exactly trust nor expect you to come up with the money. It just isn’t reasonable. To protect itself, the lender requires you to obtain hazard insurance before it will give you the money to buy the home. The policy usually must be for one year, but you should always have hazard insurance to protect yourself as well. If your house is destroyed, you will thank the lord you do.