Mortgagee Insurance

What Does Mortgagee Insurance Mean?

Mortgagee insurance is a policy included when an individual obtains a loan from a financial institution, such as a bank, to purchase a property. This policy protects the lending institution and ensures the property can be reclaimed in the event of a dispute.

Insuranceopedia Explains Mortgagee Insurance

When an individual borrows money from a bank to purchase a property, they may be required to purchase and sign a mortgagee policy. This policy can also be incorporated as a provision in the loan agreement, in which case it becomes a mortgagee clause.

The purpose of this clause is to identify the lender and grant them authority over the property if the borrower fails to meet their financial obligations.