Although there is no mandatory requirement to purchase homeowners insurance, mortgage lenders will more than likely require borrowers to purchase homeowners insurance as part of their mortgage loan agreement. In particular, borrowers may need to purchase hazard insurance, which is a component of homeowners insurance that protects the structure of the home in the event of damage or a total loss. Even if the homeowner doesn't have a mortgage, homeowners insurance can help protect their investment if disaster were to strike, making it a smart purchase.