ACORD 27 Fillable PDF | Evidence of Property Insurance
Evidence of Property Insurance
ACORD 27 Evidence of Property Insurance provides lenders, mortgage companies, and loss payees with official proof of building and contents coverage, confirming active policies and protecting financial interests without delays or confusion.
Form Type: Evidence / Certificate
Edition: 2016/03
Category: Property Insurance
Purpose: Lender/Mortgagee Notice
Download ACORD 27 Form
Free fillable PDF – Current edition
What is ACORD 27 Evidence of Property Insurance?
ACORD 27 Evidence of Property Insurance is the official proof lenders, mortgage companies, and loss payees rely on to confirm that a property is actively insured. It clearly displays coverage limits, insured perils, deductibles, policy dates, and lender interest details, ensuring all parties are financially protected.
Unlike general insurance certificates, ACORD 27 is designed specifically for property coverage. It verifies building and contents protection for financed or leased properties and confirms that lenders will receive claim payments and cancellation notices if coverage changes. This evidence is often required before mortgage approval to safeguard the lender’s investment.
Over 8 million ACORD evidence of property insurance are issued annually in the United States for commercial mortgages, residential investment properties, and equipment financing. Nearly all commercial real estate loans require this evidence at closing and renewal.
Key Differences: Property Evidence vs Liability Certificate
📄 Property Evidence (ACORD 27)
What It Shows:
- Building coverage amounts
- Business personal property limits
- Perils covered (Basic, Broad, Special)
- Deductibles
- Specific property location
- Mortgagee/lender information
Used For: Real estate loans, equipment financing, lease requirements
📋 Liability Certificate (ACORD 25)
What ACORD 25 Shows:
- General liability coverage
- Auto liability
- Workers compensation
- Umbrella coverage
- Additional insured status
- Certificate holder information
Used For: Contracts, leases, vendor requirements, client requests
⚠️ Critical Disclaimer on the Form
The evidence contains important disclaimer language:
“THIS EVIDENCE OF PROPERTY INSURANCE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE ADDITIONAL INTEREST NAMED BELOW. THIS EVIDENCE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW.”
What This Means: The evidence is informational proof only. Actual coverage terms come from the policy itself, not from what’s stated on the evidence form. Lenders must review actual policies to confirm coverage details.
Why Lenders Require Property Evidence
- Collateral Protection: Lender’s mortgage or loan is secured by the property. If building destroys without insurance, lender loses collateral and borrower may default
- Loan Covenant Compliance: Loan agreements require continuous property insurance as condition of financing
- Cancellation Notice: Evidence lists lender as mortgagee entitled to receive notice before policy cancels, preventing surprise coverage lapses
- Loss Payment Rights: Mortgagee clause ensures claim payments for property damage go to lender to protect loan balance
- Coverage Verification: Confirms coverage amounts meet loan-to-value requirements (typically requiring replacement cost coverage equal to loan amount or property value)
- Regulatory Compliance: Banking regulations require lenders to verify adequate insurance on all financed properties
When ACORD 27 is Required
The ACORD 27 Fillable PDF is mandatory in specific real estate and financing scenarios.
Common Situations Requiring Evidence
🏢 Commercial Real Estate Purchase
When Required: At loan closing
- Buying office building, warehouse, retail property
- Commercial mortgage closing
- SBA loan for business property
- Refinancing commercial property
Who Needs It: Bank, mortgage company, SBA lender
Timing: Must provide 3-5 days before closing
🏠 Investment Property Purchase
When Required: Mortgage closing
- Buying rental property (residential or commercial)
- Multi-family property purchase
- Property flipping with financing
- Contractors and trades
Who Needs It: Mortgage lender
Timing: Required before lender funds loan
🏭 Equipment Financing
When Required: Equipment loan closing
- Financing heavy machinery
- Manufacturing equipment loans
- Medical equipment financing
- Restaurant equipment loans
Who Needs It: Equipment finance company
Timing: Before equipment delivery or loan funding
📜 Commercial Lease Requirements
When Required: Lease signing or renewal
- Tenant improvements financing
- Landlord requiring tenant property insurance
- Equipment lease agreements
- Build-to-suit arrangements
Who Needs It: Landlord or lessor
Timing: At lease commencement, annually at renewal
🔄 Annual Renewal Requirements
When Required: Policy renewal
- Existing mortgage requires annual evidence
- Lease requires updated evidence each year
- Lender audit of insurance compliance
- Loan modification or extension
Who Needs It: Current lender or lessor
Timing: 30 days before policy renewal date
💼 Business Line of Credit
When Required: Credit approval
- Property-secured line of credit
- Asset-based lending
- Inventory financing with property collateral
Who Needs It: Bank or credit facility
Timing: Before credit line approval, annually thereafter
Specific Lender Requirements
|
Lender Type |
Typical Requirements |
Special Conditions |
|---|---|---|
|
Commercial Banks |
Replacement cost coverage equal to loan amount or property value (whichever greater) |
May require business income coverage, flood if in flood zone |
|
SBA Lenders |
100% replacement cost, lender’s loss payable clause, hazard coverage |
Specific SBA requirements for deductibles and perils |
|
Equipment Finance |
Coverage equal to financed amount, loss payee listing |
May require physical damage, theft, transit coverage |
|
CMBS Lenders |
Replacement cost, business income 12+ months, specific mortgagee clause language |
Strict requirements for deductibles, covered perils, endorsements |
🚫 Consequences of Not Providing Evidence
- Loan Closing Delayed: Cannot close until lender receives acceptable evidence
- Loan Default: Failure to maintain insurance with lender listed as mortgagee violates loan agreement
- Force-Placed Insurance: Lender purchases expensive insurance and bills you (often 2-3x normal premium)
- Loan Acceleration: Lender can demand immediate full payment of loan balance
- Foreclosure: Continued insurance violations can trigger foreclosure proceedings
How to Obtain ACORD 27 Evidence of Property Insurance
Step-by-Step Process
Step 1: Obtain Property Insurance Policy (2-3 weeks before closing)
Before getting evidence, you need an active property insurance policy:
- Contact insurance agent/broker
- Complete property application
- Provide property details (address, value, construction type, occupancy)
- Pay premium and bind coverage
- Receive policy documents
Step 2: Get Mortgagee Information from Lender (At loan application)
Request from your lender:
- Exact legal name for mortgagee clause
- Mortgagee mailing address
- Loan number or reference number
- Type of interest required (Mortgagee, Loss Payee, Lender’s Loss Payable)
- Any special requirements or endorsements needed
Step 3: Request Evidence from Insurance Agent (3-5 days before closing)
Contact your agent and provide:
- Lender’s complete name and address
- Loan number
- Property address
- Requested delivery method (email to lender, copy to you)
Step 4: Agent Prepares and Issues Evidence (Same day – 24 hours)
Agent completes the ACORD 27 form showing:
- Policy number and dates
- Coverage amounts and perils
- Property location
- Lender as mortgagee/loss payee
- Loan number
Step 5: Evidence Delivered to Lender (Same day via email)
Agent sends evidence directly to:
- Lender’s loan officer or processor
- Mortgagee clause department
- Title company (for real estate closings)
- Copy to borrower for records
Step 6: Lender Reviews and Approves (1-2 business days)
Lender verifies:
- Coverage amounts meet loan requirements
- Perils covered are adequate (Special form preferred)
- Lender correctly listed as mortgagee
- Loan number matches
- Property address matches loan documents
- Policy dates cover loan period
✓ Timeline for Success
4 weeks before closing: Start insurance shopping, get quotes
3 weeks before: Bind coverage, receive policy
2 weeks before: Get lender’s mortgagee information
1 week before: Request evidence from agent
5 days before: Confirm lender received and approved evidence
Why start early: If lender rejects evidence or requires changes, time exists to fix issues without delaying closing.
Download ACORD 27 Evidence of Insurance
Instant evidence of building and contents insurance for lenders, mortgagees, and financial partners.
Frequently Asked Questions
Is evidence the same as the insurance policy?
NO. Evidence is a summary certificate showing policy exists. The actual insurance policy is the contract providing coverage. Lenders need evidence for quick verification, but actual policy contains full coverage terms.
Who pays for property insurance – borrower or lender?
Borrower pays all insurance costs. Lender requires proof of coverage but does not pay premium. Some lenders escrow insurance premiums as part of monthly loan payment, but borrower still bears the cost.
Can I provide evidence before buying insurance?
NO. Must have active, paid policy before evidence can be issued. Cannot issue evidence based on quotes or pending applications.
How often must I provide updated evidence?
Annually at policy renewal, and whenever: (1) Policy changes carriers, (2) Coverage amounts change, (3) Lender requests updated evidence, (4) Loan is modified or refinanced.
What if I miss the renewal and coverage lapses?
Serious problem. Lender receives cancellation notice, declares loan default, and force-places expensive coverage (2-3x normal premium). You’re billed for force-placed insurance. Must immediately obtain new policy and provide evidence to cancel force-placed coverage.
Can I remove lender from evidence after loan is paid off?
After loan payoff, lender no longer needs to be listed. Request new evidence without mortgagee, or simply don’t provide updated evidence to paid-off lender.
What’s the difference between Mortgagee and Loss Payee?
Mortgagee: Lender with mortgage on real property (buildings). Loss Payee: Lender with security interest in personal property (equipment, contents). Lender’s Loss Payable: Enhanced protection where lender’s rights cannot be invalidated by borrower’s policy violations.
Does evidence cost money?
Typically free from your insurance agent. It’s a service included with your policy. Some agents may charge nominal fee ($25-50) for frequent revisions or rush requests.
Can ACORD 27 be emailed or must it be original?
Email is standard and accepted by nearly all lenders. PDF via email is fastest delivery method. Original hard copies rarely required anymore.