Your security deed or debt deed requires you have fire & hazard insurance. If you fail to show proof to your lender they can "Force" insurance on your property...and it is always MUCH higher than if you get it yourself. It is done to protect the lenders interest in the property in the event something like a fire destroys the home.
If you are talking about mortgage insurance and not homeowners insurance then it is also required unless you make a 20% down payment on your purchase or have 20% equity on a refinance.