The certificates and policy documents proving the borrower carries the property, liability, and specialty coverages the loan documents require, with the lender properly named.
The longer version
Lenders check coverage amounts, deductibles, carrier ratings, and the clauses that protect them: mortgagee and lender's loss payable on property coverage, additional insured on liability. ACORD 28 evidences property; ACORD 25 certificates evidence liability.
Insurance review is detail work that fails late if started late, because fixing a non-compliant policy needs the broker and sometimes the carrier. Renewal tracking then continues for the life of the loan.
In Prodeal
Insurance documents run as checklist lines with statuses and due dates, and the servicing side tracks renewals with reminders routed to the responsible party.
Common questions
- What insurance evidence does a lender require?
- Certificates and often policies showing property, general liability, and any required specialty coverage such as flood, earthquake or builder's risk, with the lender named as mortgagee and additional insured.
- What is the difference between a certificate of insurance and the policy?
- A certificate summarizes coverage and confers no rights on its own. Lenders often require the policy or a binder, plus the mortgagee endorsement, because the endorsement is what protects the lender.
- Why is insurance a frequent post-closing exception?
- Because policies renew annually and certificates go stale. A lapsed or non-conforming policy shows up on exception reports quickly, which is why renewal dates are tracked.
- The commercial loan closing checklistWhat goes on the list and who owns each line.
- The CRE due diligence checklistEvery phase of diligence, organized the way deals close.
- The post-closing audit trailWhat examiners ask for and how to have it ready.
- Loan closing softwareWhere this item is cleared before funding.