Who is a Loss Payee?
A loss payee is a clause which provides in the event of payment being made under the policy in relation to the insured risk, payment will be made to a third party rather than to the insured beneficiary of the policy. Such clauses are common where the insured property is subject to a mortgage or other security interest and the mortgagee (ie. usually a bank) requires that the property be insured and that such a clause be included. Loosely translated, a loss payee is someone who will be paid if there is a loss.
