What does a lender have the right to do if the policy is canceled?

A lender has the right to receive notice of the cancellation of an insurance policy. This is crucial because the lender has a financial interest in the property that is insured. The cancellation of the insurance policy may affect the lender’s ability to recoup the amount of the loan in the event of a loss, such as damage to the property. By receiving notice, the lender can take appropriate action, such as requiring the borrower to obtain new insurance coverage or adjusting their lending conditions to address the increased risk posed by the lack of insurance. This ensures that the lender is informed and can protect their investment in the property.