What will happen if a house covered by a standard mortgage clause is a total loss?

Insurance

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What will happen if a house covered by a standard mortgage clause is a total loss?

1. The insurer pays the mortgagee according to the mortgagee’s interest in the property.

2. The mortgagee retains no rights to any contracts involving the policy.

3. The insured receives the full benefit and passes the mortgagee’s share to the mortgagee.

4. The mortgagee receives the full benefit and passes the insured’s share to the insured.

Answer: 1. The insurer pays the mortgagee according to the mortgagee’s interest in the property.

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