Section Sch2-3 — Property Law Act 2007: Application of insurance money

3 Application of insurance money (1) If any buildings or improvements on the mortgaged land are destroyed or damaged, all money received by the mortgagee, in respect of that destruction or damage, under any insurance policy will be applied, at the option of the mortgagee, either in or towards— (a) rebuilding or repairing the buildings and improvements; or (b) payment of the principal amount, interest, and other amounts for the time being secured by the mortgage (even if the principal amount, interest, or other amounts may not then have fallen due). (2) If the mortgagee applies the insurance money in or towards payment of the principal amount, interest, and other amounts for the time being secured by the mortgage,— (a) the mortgagor may, at any time within 2 months after the date on which the insurance money was so applied, pay off all amounts still owing under the mortgage; and (b) interest ceases to be payable on amounts secured by the mortgage and paid to the mortgagee under this clause as from the date of payment. Compare: 1952 No 51 Schedule 4 cl 6