A Loss Payee is an entity that has the right to receive payment from an insurer in the event of a covered loss under an insurance policy. This term is commonly used in the context of property and auto insurance, where the financial interest of the entity must be protected in case of damage or loss.
Important characteristics to consider:
Designating a Loss Payee is essential for both lenders and borrowers, as it provides an additional layer of financial security.
At PSIC, when you get a home insurance policy and your house is mortgaged, your lender will ask to be included as a third party. This way, in case of a loss, they will be protected. It applies to Homeowners, Landlord, Mobile Home, and Condo policies, and includes the mortgagee clause endorsement.
It’s important to understand that this requirement helps safeguard both you and your lender. If something unexpected happens, like damage to your home, having this coverage ensures that the lender’s investment is secure, and it provides you with peace of mind knowing you’re both protected.
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Privacy Notice at Collection for CA employees
Last updated: June 27, 2023
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