If my mortgage bank has its own insurance interest in the property, how does that affect the payout, and who receives it first?
If your insurance policy has a “mortgagee clause”, the mortgagee bank usually has priority to receive the payout under the insurance. For instance, it may be named as the “first loss payee”.
However, it depends on the terms of the policy as to how much the bank may be paid. Your mortgage agreement may also set out how insurance monies are to be distributed and who will receive the insurance monies first.
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