Definition
The loss payee clause names your lender to receive insurance proceeds if property is damaged. It protects the lender's security interest.
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Loss payee clause ensures lender receives damage proceeds for property repairs. Protects lender's security interest. Mortgage holder named as loss payee alongside owner. Critical requirement from lenders. Prevents owner from pocketing insurance without repairs. Professional insurance agents include automatically. Essential for mortgage protection. Applies to property damage only. Contents insurance handled separately.
Pro Tip
Verify your lender is included as loss payee in your insurance policy.
Example
Loss payee clause ensured lender received insurance proceeds for fire damage repairs.