loss payee

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Loss payee

A party to whom an insurance loss payment or insurance settlement may be directly paid.

Loss Payee

The person or company to whom an insurance company makes a payment should the insured event occur. For example, in a health insurance policy, the loss payee will likely be the policyholder if he/she becomes ill. In a life insurance policy, the loss payee is likely the policyholder's survivors.

loss payee

A person entitled to payment from an insurance policy, even if the person is not the insured.For property insurance, the mortgage lender is usually the first loss payee and will be paid to the extent of the principal balance of its loan,with the remainder of the money to the homeowner. Lenders may waive payment if there is an insured loss and allow payment to the borrower to make repairs.In the alternative,it may accept payment and then disburse funds as repairs are made, as a method of making sure the insurance money goes back into the property.
References in periodicals archive ?
Often we review insurance policies only to find loss payees listed who should not be listed, mortgagees on policies when the mortgage was paid years ago, and high-value homes still carrying original low limits of insurance.
Part of the complexity, Walch said, was the involvement of several different insured parties and loss payees. "The named insured is a Special Purpose Vehicle (SPV) established to own and maintain the equipment, build the facility and contract with the off-taker."
Wells Fargo routinely endorses the TransGuardian policy to TransGuardian's clients, so they can become loss payees - or direct beneficiaries on the policy.
Are there any parties that should be named as loss payees?
In the second type, the third party will claim some type of loss resulting from the agent's alleged failure to obtain coverage for the third party as an additional insured or loss payee.
In general, most courts are not as liberal in permitting direct actions against agents when the third party sues as an intended beneficiary claiming damage from the agent's failure to include the third party as an additional insured, loss payee or mortgagee under the policy.
As a condition of the loan, Gillan agreed to obtain fire insurance covering the secured property, and Gillan's broker obtained a policy naming the bank as a mortgage loss payee. At renewal, Gillan requested that coverage be placed through another carrier, and the broker procured a policy that did not list the bank as a mortgage loss payee.
Parness Trucking Corp.(15) recognized an action by a third party against a broker for failing to procure a policy that would have covered the third party as a named loss payee.
Instead, it looked to whether the plaintiff would have had any interest under the policy that should have been procured, and it concluded that under New Jersey law a broker owes a duty to avoid damage to "persons within the foreseeable zone of hazard created by its activity." Finding the third party was within this foreseeable zone because of its status as a potential loss payee, the Impex court held that the plaintiff could assert claims against the broker.
EMAR Group Inc.(16) The court addressed the issue of whether a third party named as a loss payee could bring a direct claim against the agent for failing to place coverage with a financially solvent insurer.
The court then undertook a consideration of whether the broker owed any duty to the loss payee, stating that the question was one largely of fairness and policy.
Relying in part on the reasoning of Impex, the court stated that the broker could have foreseen and prevented the harm to the loss payee because the broker should have realized that the carrier's financial problems could lead to unpaid claims presented under the policy.