Lenders understand the importance of protecting their property portfolio. With various offerings throughout the insurance marketplace, what makes OSC stand out?

Paul Zubrowski, AVP of Underwriting, manages OSC’s Mortgage Impairment Program, underwritten by top-rated carriers. With more than 40 years of experience in commercial property casualty insurance, he delivers competitive coverage solutions to our agents and clients.

Zubrowski shared not only the ins and outs of OSC’s Mortgage Impairment coverage, but he also shared what makes OSC’s unique options so beneficial to lenders.

What is Mortgage Impairment?

“It provides coverage to mortgage lenders for losses to mortgaged properties when the required insurance is not in force,” said Zubrowski. “Most lenders will have lender-placed programs where they know the required insurance has lapsed. Mortgage Impairment will cover a loss when they are unaware.”

A prime example is when a homeowner cancels coverage, but the lender has not received a notice of cancellation for some reason and there is a loss.

“It’s a backstop to protect mortgage lenders,” Zubrowski explained.

Why is it important?

“It is important for lenders to have this coverage if they do any lending for the GSEs – Fannie Mae or Freddie Mac,” said Zubrowski. “They are required to have the coverage. Secondly, even if they have tracking programs, there are always things that slip through the cracks. It’s a good backup to have.”

Additionally, while some lender-placed programs will have automatic coverage endorsements, some carrier’s endorsements aren’t very broad, for example they may have limits on the amount that can be covered. Mortgage Impairment can step in.

OSC’s Unique Offerings

OSC partners with top-rated carriers, including an A.M. Best A+ rated carrier with competitive coverages options.

“The carrier that we use provides the broadest coverage available in the market, as well as the highest limits that are available,” Zubrowski said. “We can usually meet the needs of the largest lenders.”

A longer-term option is also available at OSC.

“We also offer a 3-year term option, which other carriers aren’t able to offer,” he added.

In addition to the first-party coverages where we will reimburse the lender, OSC’s Mortgage Impairment insurance can also provide some liability coverages, as well as options for catastrophic coverage such as earthquake and flood.

The Ins and Outs of Mortgage Impairment at OSC

OSC’s Mortgage Impairment offerings cover commercial and residential real property and excludes loans on assets such as autos, RVs, and boats. The annual premium is based on exposures at policy inception.

Competitive coverage includes:

• Homeowners insurance lapse of coverage or insolvent insurance company
• Errors and Omissions relating to the Assured’s handling of homeowner’s insurance
• Coverage for non-required perils such as earthquake
• Non-payment of property taxes leading to property seizure
• Improper determination or absence of property insurance required by Flood Act
• Errors and Omissions related to GNMA, FNMA, and/or FHLMC guidelines
• Title-related issues such as errors in searching liens or title company insolvency
• Non-disclosure to Private Mortgage Insurance carrier of mortgage in arrears
• Errors and Omissions of the Assured in connection with the satisfaction of a mortgage

More information on the program details can be found here.

In the end, Mortgage Impairment protects those who lend or service mortgages.

OSC’s offerings provide exceptional options for lenders who need higher limits or coverage their current carrier can’t offer. Lenders who place coverage separately from P&C insurance can benefit from OSC’s unique opportunities.

With the ability to offer a 3-year policy term, lenders can rest assured that when partnering with OSC, someone always has their back.