Multiple Mortgagees

February 4, 2014

There was a fire loss in Wisconsin where the seven-figure home sustained a devastating house fire. The house had a collateralized second mortgage for around $290,000t. The loss was denied. The insurer owes the homeowner's mortgage company for the $290,000, but are they obligated to pay any other mortgages off on the other fully collateralized mortgages (with other individuals involved that are not a named insured on the original policy) that are comingled with the initial second mortgage in question?

Wisconsin Subscriber

The policy states that any mortgagee is paid as their interests appear; if more than one mortagee is listed, payment is in order of precedence of the mortgages. When the claim is denied, the denial does not apply to the mortgagees if they pay any premium due, submit a notice of loss, and notify the company of any change in ownership or condition of the property. The mortgagees that are listed are covered.

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