Mississippi Property & Casualty Practice Exam 2026 – Comprehensive Prep Guide

The role of a "mortgagee" in property insurance is to hold a mortgage on the property and require insurance to protect their financial interest in that property. When a mortgage is taken out to purchase a home, the mortgagee (usually a bank or other lending institution) wants to ensure that the property maintains its value. This is because if the property is damaged or destroyed, the mortgagee has a financial stake in recovering the value of the loan given to the homeowner. Therefore, the mortgagee will typically require the homeowner to carry adequate property insurance coverage to safeguard against potential losses that could affect the property's value.

The mortgagee is not the insured party in the traditional sense; rather, they have an insurable interest in the property and may be listed on the insurance policy as an additional insured party to ensure their interests are protected. This relationship between the mortgagee and the homeowner emphasizes the importance of insurance in financial transactions involving real property.