What Is Mortgage Hazard Insurance?
Mortgage Hazard Insurance is used to transfer physical damage, theft and other coverage associated with dwellings and other structures that are typically contained in a Homeowners Insurance Policy (HO-2, HO-3, HO-5), Condominium Association and Condominium Unit Owners Policies (HO-6). Mortgage Hazard Policies are typically all risk policies with the exclusion of water damage (flood).
Benefits of Mortgage Hazard Insurance
- Broad Coverage
- Low cost to lender
- Requires borrower homeowner insurance tracking
- Highly regulated
- Common name is force-placed hazard insurance
Underwriting Force-Placed Hazard Insurance
The Mortgage Hazard Policy is a master policy which is issued to the lender. Coverage is placed on loan collateral when a Notice of Insurance (NOI) is issued for the policy. Premium is billed to the lender who directly passes the premium charge to the borrower per their loan agreement. Limits and deductibles are underwritten to the requirements of the particular portfolio. Once we understand the risk profile of your portfolio, the Miniter underwriting team will select from the 60 available endorsements to customize the policy to maximize coverage at the lowest applied cost.
Delivering Mortgage Hazard Insurance to Lenders
This policy form uses Notice of Insurance certificates (NOI) so software technology is required to efficiently place, monitor and invoice for these certificates. In addition, regulatory requirement require lenders to follow strict notification and billing procedures. Miniter’s offers three different delivery systems technology listed below along with the claims processing system that will be used to report a loss.