Home & Property
Mortgage Clause
A policy provision that protects the lender's financial interest in an insured property by directing loss payments to the mortgagee.
Last reviewed: May 2026 · Editorial methodology
Definition
The mortgage clause (also called the mortgagee clause) names the lender — e.g., 'Chase Bank, its successors and/or assigns' — as an additional payee on the homeowners policy, ensuring that any large loss payment includes the lender up to the outstanding loan balance. This clause protects the lender even if the homeowner commits fraud or fails to comply with policy conditions, as long as the lender had no knowledge of the misconduct. Lenders require this clause as a condition of every mortgage and will typically force-place insurance at the borrower's expense if the borrower's own policy lapses. Loss checks for significant structural damage are often co-payable to both the homeowner and the lender, requiring the lender's endorsement before contractors are paid. The standard ISO mortgage clause also requires the insurer to give the lender 10 days' notice before canceling for non-payment and 30 days' notice for other reasons. Borrowers should verify that their lender's name and address appear accurately on the declarations page.
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Cover Forge USA Editorial Team
Editorial Lead
This article was researched and written by the Cover Forge USA editorial team against federal sources (NAIC, CMS, FEMA, DOL, SSA, state DOIs) and standard policy forms. Bylines organize content by topic — they do not assert individual licensure. See our editorial-policy for details.
Reviewed 2026-06-14
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