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It means you still owe them money. You still owe the bank for the house so you can not by law take them off the policy. It is not really your house until you pay them off.

A bank or lender will assign themselves as a loss payee on a home insurance product whenever the homeowner/borrower fails to do so. The bank or lender does this to protect their loan in the event of a property loss.

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Q: What it mean when a bank assign themselves on your home owners insurance?
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