Before finalizing a mortgage loan, lenders require homebuyers to purchase at least a minimal level of "hazard insurance," also known as homeowners' insurance. Such insurance will cover damage or destruction by fire, smoke, wind, hail, vandalism, or another similar event. The policy will usually be written so that, in cases of severe damage, the coverage check will be made directly payable to the lender. To protect your own interests, however, you'll probably want to buy comprehensive homeowner's insurance, not just the minimum required by the lender.