noun
mortgagee
In plain English
The bank holding the mortgage, named on your homeowners policy to receive loss payments and notice of cancellation.
Your mortgage company is on your dec page as the mortgagee. They get paid first on a major property loss (up to the loan balance) and they get notice if your policy is about to cancel — that's why they nag you about lapses.
What it covers
Nothing additional. Mortgagee clause directs payment of loss proceeds to the named lender up to its financial interest, and provides them notice of cancellation.
What it does not cover
Don't confuse with loss payee (typically used for auto and personal property) or additional insured (liability).
Where it trips people up
Mortgagees that aren't updated lead to canceled policies — when you refinance and don't update the mortgagee on the policy, the new lender doesn't get notice and your coverage gets force-placed.
The technical version
A party (typically a mortgage lender) named in a property insurance policy whose financial interest is protected via the mortgagee clause, with rights to loss payment and notice of cancellation.