What do you mean by ‘Loss Payee’?
What do you mean by ‘Loss Payee’?
Now you met an accident, and your car is a total loss(meaning completely damaged beyond repair). Your bank still owes money from you in such a case when you claim the insurance; the insurance company will pay money directly to Bank or person you owe money. Here the bank is a loss payee.
What is Loss Payee? By investopedia.com
The loss payee is the party to whom the claim from a loss is to be paid. A loss payee can mean several different things; in the insurance industry, the insured or the party entitled to payment is the loss payee. The insured can expect reimbursement from the insurance carrier in the event of a loss.
BREAKING DOWN ( Loss Payee ) By Investopedia.com
Loss payee can be different from "first loss payee," which is the party that must be paid first when a debtor defaults on a loan. A loss payee is simply a generic phrase signifying the rightful recipient of any kind of reimbursement and is most often used in the auto insurance industry.
When financing a vehicle purchase, a buyer must agree to carry insurance on the secured property, otherwise forced placed insurance becomes a possibility. The financial institution making the loan typically insists that they are indicated as the loss payee on the insurance policy. The loss payee section is a section on an auto insurance policy that lists your lender’s name and address on the given collateral
The lender will usually require verification of insurance coverage, and the loss payee should be added as soon as you buy insurance for the covered vehicle. This verification of insurance cannot be satisfied simply by an insurance id card; it needs to be a declarations page. The declarations page will have multiple pieces of crucial information listed for your lender:
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