Is it a law that a mortgage company be listed on a homeowner’s policyand also listed on a homeowner’s claim payment check?

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Is it a law that a mortgage company be listed on a homeowner’s policyand also listed on a homeowner’s claim payment check?

Asked on August 3, 2011 Ohio

Answers:

FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

Most loan agreements where real property is secured for a lender's loan require that the lender be named as an additional insured on the policy of insurance of the given property.

The reason for this is that until the loan is paid off in full, the lender of a specific loan secured by a mortgage or trust deed on a given parcel has a vested interest in making sure that the security for the loan is not impaired. That is why the lender requires that it be named as an additional insured under a policy of insurance for a given property. If there is a claim under the insurance policy for a home, the lender also is named in any settlement check besides the homeowner.


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