For some credit agreements, purchasing insurance is required by law. Also, a lender can make a loan conditional upon the purchasing of insurance. However, in situations where the lender requires that insurance be purchased, the borrower is under no obligation to purchase insurance from or through the lender. Any lender that makes a loan conditional upon insurance, and then offers to provide or arrange that insurance must clearly disclose in writing that the borrower is free to choose to purchase the required insurance from any insurer that can lawfully provide it. Last reviewed: October 2014