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Borrower Insurance Requirements

Last Updated: Nov 02, 2017 03:17PM EDT
Groundfloor requires the borrower to insure the security property against physical damage for the life of the loan. Proof of insurance coverage must be provided before the loan is approved and closed.
The insurance policy includes a standard Mortgagee clause and names Groundfloor in this clause. In the event coverage is cancelled by the borrower or insurer, the insurance company is obligated to notify Groundfloor in writing of such cancellation. If a policy cancellation notice is received, Groundfloor will purchase insurance on the property and will pass the cost of the policy to the borrower’s loan. The cost of the insurance policy is recovered from the borrower upon repayment of the loan or recovery on the asset.
Groundfloor also requires that a lender’s loss payee endorsement appear in the policy. This clause ensures that Groundfloor will be listed as a loss payee on any proceeds issued in connection with an insured loss on the property.
As a condition of any loan extension provided to the borrower, Groundfloor requires the borrower to provide evidence of insurance for the duration of the extension period.

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