If the Insured breaches a policy condition, the Standard Mortgage Clause guarantees the mortgagee will be paid...

The Standard Mortgage Clause is designed to protect a mortgagee, or lender's, interest in the property, even if the insured, or borrower, breaches a condition of the policy. In the context of a claim, if the insured violates any conditions of the insurance policy—such as failing to maintain a certain level of coverage or not notifying the insurer of significant changes—the mortgagee's rights are still preserved.

This clause ensures that the mortgagee will receive compensation for their financial interest in the property, regardless of issues related to the insured's compliance with policy terms. Essentially, it protects the lender's investment by guaranteeing that they will be compensated up to the amount they are owed, rather than being affected by the policy breach which might prevent the insured from receiving a payout. The clause does not cover the amount of insurance or the property’s actual cash value; it strictly ensures payment for the mortgagee's interest in the event of a loss.