Lender placed flood insurance Frequently Asked Questions: Lender-placed Insurance Insurance coverage is a vital piece of the mortgage process, as both the homebuyer and the mortgage lender want their investments in the property protected. That’s why the standard mortgage includes a requirement that buyers maintain adequate, continuous insurance on their home, for the life of the loan. If they do not, lenders may procure a backup policy on the property, known as lender-placed insurance, to ensure continuous coverage and protect the interests of both the bank and the homeowner in the event of a mishap such as a fire. Assurant, …