Exam DISC-IA Practice Question 619
Study guide: Exam DISC-IA
A building owner sets fire to its insured building, and the insurer denies the owner's claim. A bank holds a $300,000 mortgage on the building and is shown in the declarations. The bank pays a premium installment the owner had skipped when the insurer asks, files a sworn proof of loss within 60 days of the insurer's notice, and had no knowledge of any change in risk. What does the mortgageholders condition provide?
- A) The bank recovers nothing, because a denied claim is denied for every party with an interest
- B) The bank recovers only once it has completed foreclosure on the building
- C) The bank recovers its interest, and the owner's debt to the bank is extinguished
- D) The bank recovers its interest, and the insurer takes over the bank's rights against the owner to that extent
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