Which statement is true about the Standard Mortgage Clause?

The Standard Mortgage Clause is an important component within insurance contracts that specifically addresses the rights of mortgagees (lenders) when a property is insured. The assertion that the insurer could be called to pay a loss to the mortgage despite conditions being violated is accurate because the Standard Mortgage Clause is designed to protect the mortgagee's interest in the property.

This clause ensures that, in the event of a loss, the mortgagee has a right to receive payment under the policy even if the property owner has violated certain conditions of the policy, such as failing to keep the property in good repair or neglecting to pay premiums. This protection is vital because it allows the mortgagee to recover its investment even when the policyholder may have compromised their coverage.

Understanding this aspect of the Standard Mortgage Clause is crucial for both policyholders and mortgagees, as it delineates how the interests of both parties are safeguarded in the event of a claim, ensuring that the mortgagee remains protected from any potential loss due to the policyholder's actions.