Does my mortgage agreement include any clause regarding “total loss” of the property, and how does that affect my obligations?
A “total loss” clause in a mortgage agreement specifies how insurance monies will be distributed in the event of a total loss of the mortgaged property. It is common for a mortgage agreement to include a “total loss” clause. You will need to ensure that the insurance monies are paid first to the mortgagee for any outstanding loan before the balance (if any) is paid to you.
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