Blanket Mortgage Hazard Insurance
This policy protects the lender’s entire mortgage portfolio for property damage and would be a substitute for Lender Placed Mortgage Hazard Insurance. When a loss occurs to a mortgaged property that is not covered by the borrower’s homeowner policy, the lender is protected up to the outstanding loan balance. The advantage to this type of policy is that the lender is not required to track the borrowers’ insurance policies and there is no chance for an insurance tracking error that may leave a property exposed. The disadvantage of the blanket mortgage hazard policy is that the lender must pay for this coverage and the premium is based on the size of the portfolio being insured. This coverage is typically used by community banks with a history of no lender placed primary layer losses. When this occurs the expense of the blanket premium paid for by the lender will approach the expense reduction of eliminating the tracking function.

Blanket 2nd & HELOC Mortgage Hazard Insurance
This policy protects the lender’s entire portfolio of 2nd mortgage, equity and HELOC loans and lines. When a loss occurs to a mortgaged property that is not covered by the borrower’s homeowner policy and exceeds the limit of liability of any primary layer insurance provided by the first mortgage lender, the lender is protected up to the outstanding loan balance. The advantage to this type of policy is that the lender is not required to track the borrowers’ insurance policies and there is no chance for an insurance tracking error that may leave a property exposed. The lender pays for this coverage annually and the premium is based on the size of the portfolio being insured. Since the mortgage in first position maintains primary layer insurance as well, this coverage is less expensive.