Florida Insurance Claims Adjuster License Practice Exam

What clause protects the lender in a real property policy?

1. Coinsurance Clause

2. Loss Payee Clause

3. Appraiser Clause

4. Mortgagee Clause

The correct answer is: Mortgagee Clause

The Mortgagee Clause is intended to protect the lender in the event that the borrower defaults on the loan and the property is damaged or destroyed. This clause ensures that the lender will be named as a beneficiary on the insurance policy and will receive proceeds from any potential claims on the property. Option A, the Coinsurance Clause, is incorrect because it is intended to protect the policy holder by requiring them to insure the property for a certain percentage of its value. Option B, the Loss Payee Clause, is incorrect because it is intended to protect a third party who has a financial interest in the property, such as a lienholder. Option C, the Appraiser Clause, is incorrect because it refers to the person responsible for determining the value of the property for insurance purposes and does not specifically protect the lender.