While homeowners insurance is not legally required, any homeowner who used a mortgage to help finance their home will be legally required to purchase it, their home by the lender. This is because the home does not technically belong to the homeowner as long as there is still an outstanding debt to be paid to the lender.
In doing this, the mortgage provider protects their investment by making sure that in the event of damage occurring to your home, you are able to collect a lump sum, get your home repaired and continue making payments to the lender without any interruptions.