Texas Adjuster Practice Test 2025 – 400 Free Practice Questions to Pass the Exam

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What does "forced placed insurance" typically cover?

Property when a borrower maintains their own insurance

Property when there is a lapse in the borrower's insurance

Forced placed insurance is a type of coverage that lenders obtain on behalf of a borrower who has allowed their own property insurance to lapse. This type of insurance is typically enforced to protect the lender's investment in the property, ensuring that there is a minimum level of coverage in place to mitigate financial risks associated with potential damage or loss.

The main purpose of forced placed insurance is to cover the property during the period when the borrower does not have active insurance in place, which makes it particularly relevant in situations where there is a lapse in the borrower's insurance. This ensures that the lender is protected even if the borrower fails to maintain adequate coverage on their own.

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Only personal property of the owner

Commercial properties with existing insurance

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