Who is known as the mortgagee in an insurance context?

In the context of insurance, the term "mortgagee" refers specifically to a party that holds the mortgage on a property, which is typically a lender, such as a bank or financial institution. This party has a registered interest in the property, and this is why they are considered a type of loss payee in insurance policies. When a property is mortgaged, the lender has a financial stake in the property since they have provided funds to the borrower to purchase it.

In the event of a loss, such as damage to the property that is covered under an insurance policy, the mortgagee is entitled to receive payment from the insurer up to the amount of their financial interest in the property. This ensures that the lender's investment is protected. The relationship is significant because it also means that the mortgagee typically must be named as an insured party on the insurance policy to facilitate claims directly to them in case of a loss.

While the party loaning money refers to the mortgagee, the person insured under a policy is the borrower or property owner, and the insurer is responsible for providing the coverage but is not identified as the mortgagee. Understanding this helps clarify the roles and hierarchies often present within insurance policies related to mortgaged properties