Lenders Impairment Coverage

This layer of insurance mitigates the risk involved when legal liability is proven against a lender. By definition, lender impairment can only be calculated after property is foreclosed and sold, or when legal liability is proven against the lender. Mortgage impairment policies are designed to protect the lender from physical damage losses as well as losses due to errors & omissions in servicing a mortgage. Here are some specifications about this particular coverage:

• 90 day direct physical loss coverage
• Direct physical loss or damage form required perils
• Liability of assured in procuring or maintaining borrowers insurance policies
• Liability of assured in handling of mortgagors real estate taxes
• Liability of assured in determining if property is in a flood zone
• Direct physical loss or damage from balance of perils
• Direct physical loss or damage to assured buildings and contents excluding fire, extended coverage and perils provided under other physical damage policies
• Extra Expense: following direct physical damage to or destruction of assured buildings or contents
• Loss of veterans administration, federal housing administration, Fannie Mae, Freddie Mac, Ginnie Mae, small business administration and private mortgage guarantee coverage.
• Scope of coverage applying to mortgage servicing agreements
• Title E&O
• Recordation E&O