欧博百家乐Loss Payee
The important points
On an insurance policy, a loss payee is anyone who would receive payment as part of a claim settlement.
The named insured is a loss payee by default, but mortgage lenders and co-owners of the property can be added as loss payees as well.
What is a loss payee?At the surface, loss payee is a simple term in insurance policies: a loss payee is a person who receives payment following a claim.
If you own your property outright, your insurance policy will pay you for any insurable losses. In this case, you’re the only loss payee on the policy.
It gets more complicated once mortgages and co-owners come into the picture: anyone who has an insurable interest in the property can be a loss payee.
If your home has a mortgage, the mortgage lender has an insurable interest in it, and they want to protect their investment. To that end, mortgage lenders always require that the homeowner add them to the home insurance policy. Once the policy includes the mortgage lender, the lender becomes a loss payee.
If the home were damaged, any claim settlement would be made co-payable to the mortgage lender and the homeowner.
Every home insurance policy in Canada includes the Standard Mortgage Clause, which explains how the mortgage lender fits into the insurance picture.
The lender gets their share of any claim settlements. They even get their share if the homeowner does something to violate the terms of the policy. If the homeowner intentionally burns down their house for the insurance money, they get nothing—that’s insurance fraud. However, their mortgage lender would still get a settlement for their share of the property. Then, the insurance company can recover that settlement from the homeowner that committed the fraud (fraud is never a good idea, in other words).
There can be other loss payees aside from mortgage lenders, too. Anyone who has at least partial ownership of the property could be a loss payee. Owners who aren’t named on the insurance policy need to be added as additional insureds before they’re officially loss payees, however.
Example
April and her friend Natascha decide to invest in a rental property together. They get a co-ownership mortgage and they split all the payments equally. At the outset, April contributes 10% as a downpayment, Natascha also contributes 10%, and their mortgage lender contributes the remaining 80%. These percentages represent each party’s interest in the property.
April takes out an insurance policy for their rental home. As the person buying the policy, she is the named insured, and a loss payee by default. April adds their mortgage lender to the policy as well, making the lender a loss payee. She also adds Natascha as an additional insured, because Natascha is a co-owner of the home. Natascha is now also a loss payee.
With this example in mind, here are a few scenarios to help illustrate what loss payees are and how the concept works: