Homeowners Insurance - Also called hazard, fire or property/casualty insurance, this type of insurance protects against physical perils such as fires, windstorms, falling trees, and other disasters. Additionally, most policies will also provide general liability protection to cover you in the event of accidents on your property. For example, if a visitor to your home tripped on your broken front step and became injured, then sued you, your homeowners policy would protect you. Homeowners insurance is always required in an amount equal to at least the loan amount. Common policies are written to cover full replacement cost of the improvements. 

Flood Insurance - This requires a separate policy from your traditional homeowners coverage.  Private insurance companies do not offer this as part of your primary coverage.  The federal government instituted the National Flood Insurance Program years ago to assist homeowners with flood problems. Flood maps, delineating the various flood zones, are available at local town halls. If you are obtaining a mortgage and your home is located in one of these flood zones, you will be required to purchase flood insurance from the federal government.

Earthquake Insurance - This also requires a separate policy from your traditional homeowners coverage since private insurance companies do not offer this as part of your primary coverage. As you would expect, this type of coverage is most common in California although there have reports over the past several years of small earthquakes in the northeast United States.  This type of coverage is not usually required to obtain a mortgage. 

Mortgage Insurance (PMI) - Mortgage insurance does not insure you, rather, it offers protection to the lender in the event of your default by guaranteeing a portion of the loan.  PMI is required when a home buyer [1] makes a down payment of less than 20% of the purchase price of a home or [2] when a homeowner is refinancing and the mortgage loan exceeds 80% of the value of the property.  

Mortgage insurance is necessary because without it, lenders would not be able to offer mortgage loans with down payments of less than 20%. With this coverage, mortgage lenders can offer loans with a down payment as low as 3%.  Unfortunately, you pay for it.   

There are alternatives to paying PMI mortgage insurance. Some lenders may offer low down payment loans with no mortgage insurance requirement in exchange for charging a higher interest rate on the loan. But even if you are required to purchase this insurance, coverage is not required for the life of the loan.  Usually, you may remove your PMI and stop paying the premiums after the second year or, when you have at least 20% equity in your home.  This equity can come from either paying down the loan or an increase in the market value.  Generally, you must obtain a a new appraisal (at your expense) and request that coverage be terminated.

Mortgage Credit Life Insurance - Not to be confused with the mortgage insurance described above, mortgage credit life insurance programs charge a small monthly premium and will pay off your loan if you die. This type of insurance is never required and is simply an option for your financial planning

Title Insurance - This coverage provides protection in the event that a flaw in the title is detected after the property has been bought. Although attorneys conduct a title search to make sure that a seller is giving "marketable title,"  there may be instances in which title issues could arise after closing.  There are two types of policy coverage, one covers the lender for the mortgage amount while the other covers the home buyers' equity.  Fortunately, this is a one-time charge with no annual premium but it is a requirement for lending.