Through escrow, the insurance premium for the entire first year will be paid. Thereafter you can make whatever arrangements you want with your agent (pay monthly, quarterly,...) for the following years. If the lender is collecting insurance payments for you in an impound account, you would pay monthly with your mortgage payment, starting immediately, in addition to paying the first year's premium. If you are buying a condominium or townhouse with a blanket insurance on the entire complex, then you would automatically fall under their policy (and pay your share as part of your homeowners dues) with no up front payment.