When a mortgagor of property effects insurance in the mortgagor's own name providing that the loss is payable to the mortgagee, or when the mortgagor assigns an insurance policy to the mortgagee, the insurance is considered to be upon the interest of the mortgagor. The mortgagor does not cease to be a party to the original contract, and any act of the mortgagor which otherwise would avoid the insurance will have the same effect although the property is in the hands of the mortgagee.
26.1-29-30. New contract on transfer of insurance on mortgaged property - Effect of mortgagor's acts. If an insurer assents to the transfer of an insurance contract from a mortgagor to a mortgagee and at the time of the insurer's assent imposes further obligations on the assignee, making a new contract with the assignee, the acts of the mortgagor cannot affect the mortgagee's right under the insurance.