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Noncontribution Mortgage Clause

Definition of "Noncontribution mortgage clause"

Endorsement to standard fire policy to protect the interests of a mortgage lender without providing for apportionment. A mortgage lender may choose to have his or her rights to the property protected by a mortgage clause. Where an insured has more than one policy, claims are normally paid by assigning a portion of the loss among the insurance carriers under terms of the policy's pro rat a liability clause. A full contribution mortgage clause provides that losses on the lender's interest would be apportioned in the same manner as the rest of the policy. But with a non contribution mortgage clause, the lender's interest would be protected up to the policy limits with no apportionment.

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