Mortgagee
Definition:
A lender or bank that holds a mortgage on the property and has rights under the insurance policy.
Explanation:
The mortgagee is protected by being named on the policy. Insurance checks for property damage typically list both the homeowner and mortgagee to safeguard the lender’s investment.
Example:
If your home burns down, the insurance payout may be issued jointly to you and your bank.
Why it matters:
This term affects how claims are handled and what payout a homeowner may receive.