(1) Both the mortgagor and the mortgagee have an insurable interest in the mortgaged property.

(2) Unless a contrary intention appears expressly or by necessary implication, where the mortgagor has covenanted to insure all or any part of the mortgaged property and fails to do so as required by the terms of the mortgage, the mortgagee shall be entitled, after giving notice in writing to the mortgagor, to insure and keep insured the mortgaged property against loss or damage by theft, fire, earthquake or other natural disaster; and the premiums paid by the mortgagee for any such insurance shall be secured with the same priority as the mortgage and, where the mortgage secures payment of money, shall be added to the principal sum with interest at the same rate as on the principal sum.

(3) Unless a contrary intention appears expressly or by necessary implication, where the mortgagor has covenanted to insure all or any part of the mortgaged property and the insurance has been effected by the mortgagor, or on behalf of the mortgagor by the mortgagee, all money received on such insurance shall be applied in making good the loss or damage in respect of which the money is received unless the mortgagor elects to apply all or part of it toward the performance of the act or acts secured by the mortgage.