Insurance 101 – Volume 44 – Full or Partial Assignment of Mortgage Debt

Full or Partial Assignment of Mortgage


The language of the subrogation provision, which requires the insurer to make full payment to the mortgagee in order for the insurer to take a full assignment of the mortgage, has caused serious practical problems for insurance companies. Where the insurer pays only part of the outstanding debt, the insurer is entitled to be subrogated, to the extent of its payment,  to the rights of the mortgagee, subject to the prior right of the mortgagee to recover the full amount of the mortgagee’s claim not covered by the insurance proceeds. The mortgagee is entitled to be made whole before the insurer recovers. The mortgagee should not be allowed to profit, however, in the event of a partial payment.

The following video was adapted from my book, “Insurance Claims A Comprehensive Guide” Published by the National Underwriter Company and is available at the Zalma Insurance Claims Library.

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The author and publisher disclaim any liability, loss, or risk incurred as a consequence, directly or indirectly, of the use and application of any of the contents of this blog. The information provided is not a substitute for the advice of a competent insurance, legal, or other professional. The Information provided at this site should not be relied on as legal advice. Legal advice cannot be given without full consideration of all relevant information relating to an individual situation.

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