Final answer:
The statement is False; insurers are obligated to include the mortgage-holder in any loss payments for mortgaged property, reflecting the mortgage-holder's interest in the property.
Step-by-step explanation:
The statement given is False. In the context of insurance, especially when it pertains to a mortgage on property, the insurance policy often includes a clause that protects the mortgage-holder's interest in the property. This means that if there is a financial loss and a claim is made, the insurer is obliged to include the mortgage-holder in any payments for loss to the mortgaged property, up to the amount of the mortgage-holder's interest in the property.
The insurance method of protecting from financial loss involves the policyholder making regular payments, also known as premiums, to the insurance entity. When the insured party suffers a loss from an event that the policy covers, the insurer compensates for the financial damage. This does not mean a blanket money-back guarantee but rather a fulfillment of the terms as laid out in the insurance policy.
It is also relevant to understand the concept of moral hazard, which arises when an entity is insured against a certain event and thus may become less vigilant in preventing that event's occurrence. While moral hazard is an important consideration in insurance, it does not affect the contractual obligation to the mortgage-holder in the event of a claim for property loss.