Homeowners insurance is a policy that pays to repair or rebuild your home after covered damage — fire, wind, theft, a tree through the roof — and typically covers your belongings and personal liability too.
If you have a mortgage, this coverage isn't optional. The house is the lender's collateral, so every lender requires an active policy from closing day onward. Let it lapse and the lender will buy "force-placed" coverage on your behalf — pricier, and it protects them, not you.
In practice you rarely write the check yourself. Most lenders fold the premium into your monthly payment and pay the insurer annually from an escrow account, alongside property taxes — here's how escrow works. That means a premium increase shows up as a higher monthly payment, even if your rate never changes.
Two things worth knowing: the policy should cover the cost to rebuild, not the price you paid (land doesn't burn down), and shopping your policy every year or two is one of the few painless ways to shrink the payment you estimate with a mortgage calculator.