This type of insurance protects the lender against a lawsuit due to default by the borrower. This is generally required whenever the loan amount exceeds 80 percent of the fair market value of the property being purchased. It may also be required in other instances. The requirement for this insurance is usually waived after the loan has been reduced to a specific level, but typically there is a mandatory three-year requirement even when the loan-to-value ratio is less than 80 percent. It may last for 10 years.