Insurance of Mortagees
Chapter 7 of the Plan provides for automatic co-insurance of mortgagees. If the insurer has received notice that the interest insured is mortgaged, the mortgagees automatically receive the protection provided for in Chapter 7. The mortgagee must be given 14 days’ notice of amendments or cancellation of the insurance policy and in the case of a total loss the mortgagee’s interest must be paid first. The Plan’s rules provide a safety net in the event of practical administrative mistakes and omissions.
The ITCH does not have any similar clauses. Mortgagees are typically protected through a series of assignment clauses specifically drafted for that purpose.