Exam DISC-IA Practice Question 36
Study guide: Exam DISC-IA
A homeowner whose house carries a $180,000 mortgage, with the lender named under the HO-3's mortgage clause, deliberately burns the house down, and the insurer denies the homeowner's claim. The lender knew of no change in risk, the premium was paid up, and the lender files a signed, sworn statement of loss within 60 days of the insurer's notice. What does the mortgage clause provide?
- A) The lender recovers nothing, because the owner's act voids the policy for all
- B) The lender recovers the full value of the house, whatever its loan balance
- C) The lender's claim is paid despite the denial, and the insurer is subrogated
- D) The lender and the owner share the payment as their interests appear
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