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Farmowner, Farm, Homeowner, Mobilehome and Dwelling Policies Mortgage Clause


This clause applies to Farmowner, Farm, Homeowner, Mobilehome and Dwelling policies only and applies only to the mortgagee which is specifically listed on the Declarations. This clause becomes a part of the policy and supersedes and replaces any other mortgagee clause to the contrary. We must be notified within 10 days of any assignment of or change in the mortgagee for this clause to be applicable.

The word “mortgagee” includes trustee. If a mortgagee is named in this policy, any loss payable under Coverage A or B of the Homeowner, Mobilehome and Dwelling policies or Section I, III, and IV of the Farm and Farmowner policies will be paid to the mortgagee and you as interests appear. If more than one mortgagee is named, the order of payment will be the same as the order of precedence of the mortgages. If we deny your claim, that denial will not apply to a valid claim of the mortgagee, if the mortgagee:

a.   Notifies us of any change in ownership, occupancy or substantial change in risk of which the mortgagee is aware.
b.   Pays any premium due under this policy on demand if you have neglected to pay the premium; and
c.   Submits a signed, sworn statement of loss within 60 days after receiving notice from us of your failure to do so. Policy conditions relating to Appraisal, Suit Against Us and Loss Payment apply to the mortgagee.

If we decide to cancel or not to renew this policy, the mortgagee will be notified at least 10 days before the date cancellation or non-renewal takes effect.

If we pay the mortgagee for any loss and deny payment to you:

a.   We are subrogated to all the rights of the mortgagee granted under the mortgage on the property; or
b.   At our option, we may pay to the mortgagee the whole principal on the mortgage plus any accrued interest. In this event, we will receive a full assignment and transfer of the mortgage and all securities held as collateral to the mortgage debt.

Subrogation will not impair the right of the mortgagee to recover the full amount of the mortgagee’s claim.

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