Amount and application of insurance money

(1) The amount of an insurance effected by a mortgagee against loss or damage by fire or hurricane under the power in that behalf conferred by this Act shall not exceed the amount specified in the mortgage deed or, if no amount is therein specified, two third parts of the amount that would be required in case of total destruction to restore the property insured. (2) An insurance shall not, under the power conferred by this Act, be effected by a mortgagee in any of the following cases, (a) where there is a declaration in the mortgage deed that no insurance is required; 54 (b) where an insurance is kept up by or on behalf of the mortgagor in accordance with the mortgage deed; (c) where the mortgage deed contains no stipulation respecting insurance, and an insurance is kept up by or on behalf of the mortgagor with the consent of the mortgagee to the amount to which the mortgagee is by this Act authorised to insure. (3) All moneys received on an insurance of mortgaged property against loss or damage by fire or hurricane effected under this Act, or on an insurance for the maintenance of which the mortgagor is liable under the mortgage deed, shall, if the mortgagee so requires, be applied in making good the loss or damage for which the money is received. (4) Without prejudice to any obligation to the contrary imposed by law, or by special contract, a mortgagee may require that all money received on an insurance of mortgaged property against loss or damage by fire or hurricane effected under this Act, or on an insurance for the maintenance of which the mortgagor is liable under the mortgage deed, be applied in or towards the discharge of the mortgage money, notwithstanding that no portion of the mortgage money has accrued due at the date of the receipt of the insurance money.