Business and Personal Finance Dictionary

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• STANDARD MORTGAGEE CLAUSE
  
  A provision in a hazard insurance contract stipulating that in the event of a loss, proceeds will be paid to a secured party. Usually used when the insured property is real property. Includes personal property that is insured as contents of the insured real property. Sometimes referred to as simply a mortgagee clause, the standard mortgagee clause is actually a much broader, stronger type of insurance policy stipulation. Under the standard mortgagee clause, the secured party is protected against any act or neglect of the insured that may otherwise invalidate the policy for the owner. For example, if an insured burns down his insured property, his arson may void his insurance coverage, but it does not invalidate the insurance protection provided to his secured lender. Sometimes called a New York mortgagee clause. See mortgagee clause.
  
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