Mortgage Impairment Coverage
Coverage protects loss to your credit union’s interest in mortgaged residential or commercial property through an error or accidental omission in the operation of your procedures to require or maintain insurance to protect its interest.
Your credit union has a mortgage on a property. The mortgagor's insurance company notifies your credit union that property insurance was cancelled due to non-payment of premium. Your credit union’s customary procedure is to maintain insurance to protect your interest. Procedures to place insurance coverage were not followed. A short time later, the house burns down. If there is a loss to the credit union due to a subsequent default on the mortgage payment the loss is protected, subject to you completing power of sale or foreclosure.
Coverage also protects against loss to your credit union’s interest in mortgaged residential or commercial property through the failure of the mortgagor to procure and maintain sufficient insurance to protect your interest.
Your credit union has a mortgage on a property. The house burns down and the member stops making the monthly mortgage payments. After the loss, you discover the member has no valid insurance. Your credit union forecloses on the property and we provide coverage.
Foreclosed Property Coverage (Residential and Commercial)
Coverage protects your credit union against direct physical loss to the residential or commercial property in which your credit union has commenced Power of Sale, Foreclosure, Quit Claim or any other procedure to realize your debt.
Non-Foreclosed Property Coverage (Residential and Commercial)
Protects against direct physical loss to residential or commercial property in which your credit union has knowledge of insufficient insurance.