Home insurance is often included in your mortgage payments through an escrow account, which most mortgage lenders require. An escrow account is essentially a savings account managed by your mortgage servicer, used to pay annual or biannual expenses like property taxes and insurance on your behalf. This arrangement makes managing housing expenses easier.
With an escrow account, expenses for principal, interest, taxes and insurance are combined into one monthly payment. The lender or loan servicer prorates these expenses and adds them to your mortgage payment. Having your property taxes and home insurance disbursements done through escrow ensures your premiums are paid on time and your lender's investment is protected.