Los Angeles Claims Adjuster Property and Casualty Practice Exam 2026 - Free Claims Adjuster Exam Questions and Study Guide

The standard mortgage clause is designed to protect the interests of the lender (the bank) in the event of a loss covered by an insurance policy. This clause ensures that the bank can receive compensation for its financial interest in the property even if the insured party has defaulted on the policy’s obligations.

In the context of the given options, if the insured intentionally caused the loss, the bank, being a separate entity covered by the mortgage clause, may still be able to provide proof of loss to claim its entitled amount under the insurance policy. This is because the mortgage clause typically stipulates that the rights of the mortgagee (the bank) to recover are preserved despite the actions of the mortgagor (the insured).

Thus, even if the insured committed an intentional act that led to the loss, the bank can prove its loss under the terms of the mortgage clause as long as the policy remains in effect and the bank has complied with its obligations under that clause. This scenario reflects the protective nature of the mortgage clause in ensuring that the lender's financial interest is safeguarded regardless of the insured's conduct.