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.

Where this term matters

Home Insurance →/states →

Tip

Glossary definitions are educational. Always check your own policy language — insurers can define common terms differently from one another. When in doubt, request a written explanation from your agent.

Related terms

Lender Loss PayableA policy endorsement that directs personal-property loss payments to a creditor — such as a lender financing a vehicle or equipment — up to the loan balance.Dwelling CoverageCoverage A on a homeowners policy — pays to repair or rebuild your home's physical structure.Coverage A (Dwelling)The homeowners policy section that covers the main structure of the home against damage from covered perils.Replacement Cost Value (RCV)The cost to replace lost property with new items of similar kind and quality — no depreciation.

Related guides

Source: Cover Forge USA editorial team|Last verified: May 2026|Methodology
Definitions are educational and may be simplified. Always refer to your policy contract and consult a licensed agent for terms that affect coverage decisions.
CF

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 June 2026

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