What type of insurance must a buyer usually obtain when securing a mortgage?

In the context of securing a mortgage, the buyer is typically required to obtain property insurance, also known as homeowners insurance. This type of insurance protects the homeowner against risks such as fire, theft, and certain types of damage to their property. Lenders require proof of this insurance because it safeguards their investment in the home, ensuring that they can recover their loan amount in case of damage to the property.

Liability insurance, while important, typically covers events that occur on the property, such as injuries to others. Title insurance, on the other hand, protects against issues related to property ownership, such as title defects or liens, but does not cover physical damage to the home. Home warranty insurance offers coverage for repair or replacement of home systems and appliances, which is not typically required by lenders for obtaining a mortgage.