Under a Mortgagee Loss Clause, If a Mortgagor-Owner Intentionally Destroys

question 1

Multiple Choice

Under a mortgagee loss clause, if a mortgagor-owner intentionally destroys mortgaged property:

• A)the mortgagee-bank cannot recover from the insurance company.
• B)the mortgagee-bank can recover from the insurance company, which can then recover its loss from the owner.
• C)the mortgagee-bank can recover from the insurance company, but the insurance company cannot recover its loss from the owner.
• D)none of the above.

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Definitions:

Sales Budget

A sales budget estimates the expected sales revenue for a certain period, projecting quantities sold and revenues earned.

Depreciation

The accounting process of allocating the cost of a tangible asset over its useful life.

Merchandise Inventory

Goods that a retailer, wholesaler, or distributor holds for the purpose of resale.

Monthly Depreciation

The allocation of an asset's cost over its useful life on a monthly basis, reflecting its consumption or wear and tear.