Los Angeles Claims Adjuster Practice Exam – Comprehensive Property and Casualty Prep 2026

The correct answer focuses on the essential requirement that the mortgagee must be notified about changes related to the insurance policy. When a property is mortgaged, the lender (mortgagee) has a vested interest in ensuring that the property remains adequately insured throughout the life of the mortgage. Therefore, the insurance policy typically includes a notification clause that requires the insurer to inform the mortgagee about any cancellations or nonrenewals of the policy.

This safeguard helps protect the mortgagee's financial interest in the property, as they need to be aware of any potential lapse in coverage that could expose the collateral to risk. While the other options refer to responsibilities that might be associated with the mortgagee, such as claims handling, maintaining coverage, or managing premium payments, these are not requirements regarding policy changes or cancellations specifically mandated by insurance policies. Thus, the emphasis on notification about changes is crucial to ensuring that both the borrower and the lender are aligned and aware of the insurance status.