Mortgage impairment developed from a single section policy to a multi-section policy that today offers full compliance with agencies such as Fannie Mae (FUMA) and Freddie Mac (FNMC).

Mortgage impairment offers a policy form that is designed to protect the owner interest of institutions in their mortgage loan portfolios against physical loss or damage from uninsured or underinsured perils.

There are three principal areas of coverage:

1. The first section protects an insured for loss to owner interest in property (including repossessed property for up to 90 days) by reason of physical loss or damage caused by fire and/or perils which the assured specifically required the borrower to insure against as a part of the mortgage agreement, when such fire and/or hazard insurances are found to be inadequate or non-existent. The policy also responds in the event that an insured is unable to collect on the insurance(s) for any reason (other than that of dishonesty). An example would be in the event the direct insurer is insolvent.
2. The second section protects an insured against claims made against the insured for its negligent acts, errors or omissions in failing to maintain valid insurance against the perils of fire and other insurances as required of the mortgage agreement. Defence costs are provided for and included within the policy limit.
3. The third section protects an insured against loss to owner interest in property (including repossessed property for up to 90 days) as a result of losses caused by perils other than fire and/or hazard insurances required of the borrower as a part of the mortgage (including but not limited to, earthquake, landslip, dambreak, vandalism, abnormal subsidence, collapse, wavewash etc.

The first and third sections are complementary and provide comprehensive "all risks" protection for an insured's mortgage portfolio.

Further related errors & omissions coverage relevant to mortgage lending is readily available.