Mortgage & Insurance

The answer probably depends on the terms of your mortgage agreement. Check to see whether it makes any provision for casualty or property loss payments. Some mortgage agreements give the mortgagee the exclusive right to choose between applying the insurance proceeds to reduce the mortgage debt or allowing the mortgagor (you) to use the proceeds to restore the collateral (fix the property). New York doesn't have any statutes controlling this question, so the answer would be determined by contract/agreement language. I don't know whether Texas has any statutes or laws that govern this question.