Glossary

Loss payee

A party named on a policy to receive claim money for a particular item or property up to its financial stake, such as a lender or lessor.

Also called: loss payable clause, lender's loss payable

A loss payee is a person or company that the policy directs the insurer to pay, along with or instead of the policyholder, when a specific piece of property is damaged. The loss payee has a financial stake in that property, such as a lender that financed it or a lessor that owns it. The idea is more common on auto and commercial policies, where it appears as a loss payable clause. On homeowners policies it turns up for a manufactured home titled as personal property, a leased solar system, or a financed item listed on a schedule.

Payment to the loss payee is limited to its interest, usually the unpaid balance. Say a lender is owed $30,000 on a $50,000 loss: it receives up to $30,000 and you receive the rest. Under a plain loss payable clause the loss payee's rights depend on yours, so a denial of your claim usually denies theirs too. A lender's loss payable clause gives the lender stronger protection, much like the mortgagee clause.

A lender on the house itself is a mortgagee, though insurers sometimes use the terms loosely. Check the declarations page to see which label and clause apply, and keep the entry current after a payoff. See why your mortgage company is on the claim check for how joint checks work.

Last reviewed October 10, 2026

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Related terms

Mortgagee The lender that holds the mortgage on the home, listed on the declarations page so it gets cancellation notices and shares in payments for dwelling damage. Mortgagee clause The policy condition that gives the lender its own right to be paid for dwelling losses and protects that right even when the owner's claim is denied. Additional interest A person or business with a financial stake in the insured property, such as a lienholder, listed on the policy to get notices but not coverage. Scheduled personal property Individually listed valuables, such as jewelry, art and collectibles, insured for a stated amount each, with broader protection than standard contents coverage. Named insured The person or people listed on the declarations page as the policy's owner, who hold the contract rights and receive notices and claim payments.

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