What is a mortgage?

Mortgage violation is a common type of insurance contract that serves to protect the interests of the creditor in any of the mortgage contract. The idea of ​​this type of coverage is to prevent the creditor to cause losses that may occur when the property is damaged or destroyed, and the debtor cannot maintain insurance coverage to compensate for loss. Mortgage insurance is also useful in situations where the error in asset management resulted in a loss that increases the level of the lender.

Many forms of mortgage insurance deals with a wide range of potential situations in which a property held as collateral could maintain some type of physical damage. This would include coverage of damage by fire, wind, water or flash. The exact scope of insurance deterioration is determined by the conditions of the mortgage contract. In principle, any types of assets that the debtor is obliged to maintain for the Propo for the duration of the mortgage will also be included according to the conditions of the mortgage policy. This mirroring of the requirements betweenTwo forms of coverage are often called coverage of desired hazards.

Mortgage coverage is also often useful in situations where creditors must exclude real estate after the debtor's failure on the mortgage. In many jurisdictions, insurance deterioration serves for temporary creditor protection until it can be sold to closed properties to new owners who are then entrusted with responsibility for acquiring real estate for the period of the new mortgage agreement. This helps protect the creditor from possible damage from weather or other events during the market closure process and to the extent that the property is sold.

It is important to realize that the mortgage coverage is not changed by the Thdlužník liability for maintenance of property insurance on the property, which it receives from the creditor under the conditions of the mortgage agreement. It is assumed that the debtor will comply with the terms of this contract and secure and maintain insurance coverage that is in compliancefor the provisions specified in the mortgage agreement. Many creditors will require documented evidence that the debtor's insurance is acquired, often in the form of an insurance certificate or other proof of insurance prepared by the insurance provider. Coverage of deterioration is only activated if a certain type of disaster damages the assets and the creditor subsequently learns that the debtor has failed to maintain the level of insurance coverage cited in the mortgage agreement.